If any industry should be inured to the globalization trend, it is travel, which after all was built on making it possible to go anywhere and everywhere. Thats fortunate because in 2005 globalization hit the agency sector with sudden, intense force, particularly in the case of two companies that rapidly transformed themselves into major global players.
BCD Holdings, a Dutch company, combined WorldTravel BTI, which it already owned, with large acquisitions to create a global mega-agency. HRG (formerly Hogg Robinson) staged a similar maneuver.
As a result, both companies rank high on the 2006 Power List based on the sum of what their individual parts would have achieved in 2005. That is a departure for this listing and reflects a recognition of this continental shift.
While consolidation continued, so did separations. Expedia (with subsidiaries Hotels.com, Hotwire and others) became independent of InterActiveCorp. Cendant decided to spin off or sell Travelport, its travel distribution division.
Other trends continued or accelerated. For instance, the two giants in online travel enjoyed significant gains in sales: Expedia grew to $15.6 billion from $13.2 billion in one year, while Travelocity jumped 50%, to $7.4 billion from $4.9 billion.
Online and off, the Power List again demonstrates that the big get bigger. And they will look bigger still on next years Power List as a result of Carlson Wagonlits pending acquisition of Navigant; they are the current holders of the lists No. 2 and No. 7 slots, respectively.
The Power List is all about size and growth, but growth isnt confined to the top. This years list includes more agencies with sales in excess of $100 million than it did a year ago, and many of them saw significant growth.
Among those reporting or approaching double-digit gains in sales were Travel and Transport (No. 16), Travizon (No. 18) and Tzell (No. 19).
Moreover, those agencies that were not themselves global continued to develop global affiliations through organizations like Radius and GlobalStar.
The business of leisure
The Power List, judging from the business focus of many of the top players, is largely about business travel and corporate travel management, but the Power List also includes some powerhouses in leisure.
Liberty (No. 11) and AAA (No. 8) are overwhelmingly sellers of vacations, while leisure is Carlson Leisure Groups (No. 17) middle name.
Travelers Advantage (No. 27) is nearly 80% leisure, and the business focus of National Leisure Group (No. 15) is, as its name suggests, 100% on leisure.
Whats more, the giant online travel sellers such as Expedia (No. 3) and Travelocity (No. 6) are heavily leisure-focused.
The Power List is also about technology, change and the pace of change. When asked about plans, many companies said they were seeking to grow through acquisition. Others answered that question by indicating their interest in enhanced technology.
But in the final analysis, the Power List is about diversity, and as such, it depicts a dynamic industry that resists static or conventional business models.
Because no two travel sellers are alike, theres a certain arbitrary quality to any industry ranking. The Power List would take on a very different complexion if it were based on different criteria: if AAA clubs were listed separately, if all subsidiary companies like Hotels.com were broken out, if private-label and fulfillment operations were included and if fee-based travel management companies were ranked on number of transactions rather than on revenue.
And finally, independent of categories and rankings, it is clear that the business of travel distribution has entered an era of accelerating change that no travel seller will escape.
No matter how it is constructed, the Power List demonstrates that many companies are continuing to make the most of change and the opportunity it brings.
Of course, the travel business does not operate in a vacuum. Events beyond the control of the industry will undoubtedly have unforeseen impact on travel, so unknowns will also shape Power List 2007.
Some themes, however, will recur. There will be growth, bigness, mergers and acquisitions, successes and failures, change and challenges. In the end, the power players will be those that can juggle it all.
To view the survey in its entirety, click here.