Joining forces

It's getting harder for small, independent travel agencies to make it on their own, but is joining a mega the only way for an agency to go?

Nicolette Yianilos, part-owner of Esprit-Rainbow Travel in Bethesda, Md., came up with a different solution.

After 26 years as a travel agent and 20 years as an agency owner, Yianilos joined forces with another agency owned by Selma Deleon, located about a mile away.

The merging of their individual agencies proved to be profitable for Selma Deleon, left, and Nicolette Yianilos. What makes their story stand out is that neither agency bought the other out; instead, they became equal partners.

This despite the fact that the first industry lawyer they approached to help them draw up a partnership agreement "wouldn't touch it because he said a 50-50 ownership was doomed to failure," said Yianilos, who can laugh about it now.

Although daunted by the lawyer's words of caution, "we had already worked out the kinks, and were pretty sure we wanted to do it," she said, adding that neither agent wanted to have a controlling share.

"We discussed a lot of things ahead of time [regarding] philosophy, benefits and staffing, and we looked at the financials," she said.

Yianilos, whose agency was about 60% corporate, had an office on the 10th floor of an office building.

And Deleon's agency, located in a street-front building in a prime area, came with extra space.

Since Yianilos knew she could get out of her lease and wanted to increase her leisure market, anyway, she opted to move her staff into Deleon's office space.

Deleon was primarily a leisure agency with a 60-40 leisure-corporate mix with a staff of leisure specialists and a location that attracted walk-ins.

"It was critical to both of us that our staffs were willing to stick with us during the merger," she said. "The close proximity of the two agencies helped with that."

Pronouncing the merger, which took place Nov. 1, 1998, an unqualified success, Yianilos now says: "It was hard, but this year has been one of the most profitable either of us has ever had.

"The advantages were the consolidation of overhead, booking and back-office expenses, and we have realized that," she said.

"We also were able to double our volume, which means we have more clout with our vendors," Yianilos said.

-- Felicity Long

... After a bumpy start

Although Nicolette Yianilos gives her merger two thumbs up, she admits that the move was not trouble free. "Even though we had gone over pages of office procedures, there were so many things we hadn't discussed," she said.

Espirit Rainbow's Web site, at www.espiritrainbow.com.Because her staff moved into the other office space, "on the first day, we realized we didn't know where the pencils were stored," she said. "The first weeks were very trying for the staff, and the first six months were difficult for Selma [Deleon, her partner] and me," Yianilos said.

"We came up with some hard conflicts, and we got through them. Now we seem to agree on everything," she said.

The agencies posted about $4 million in sales each prior to the merger. Now, the combined agency has about an $8 million volume, according to Yianilos.

Capitalizing on each other's strengths, Yianilos calls herself managing partner-operations, and Deleon is managing partner-marketing.

"Selma engineered putting the newsletter together, which she puts out two or three times a year," she said.

She credits the pair's friendship, which had been established many years prior to the merger, for helping smooth rough waters.

"We didn't want to jeopardize our friendship, so there was that risk," she said.

In addition to being motivated by a desire to succeed financially, "we were stuck with each other and had to make it work," Yianilos joked.

The HRM connection

The hotel sector of our industry is sharing in the wealth of a prosperous economy.

Richard Turen.Average hotel occupancy rates hovered in the low to mid 60% range during the first part of the 1990s, but we are now seeing significantly higher figures in major cities throughout the U.S. and Europe.

Cities such as New York, Chicago, London and Paris are reporting soaring occupancy rates.

Hawaii has seen its occupancy increase by more than 10 percentage points.

All of which raises the question: How are you going to secure the best hotel rate for your clients when it is so easy for them to go shopping on the Web?

We all know there are consortium deals, hotel discount firms that work with agents and frequent stay programs -- all of which produce discounted rates. But there is another way to secure the best rates at the hotels you use the most.

It isn't high-tech but it works more often than you might imagine:

Hawaii is one of the states enjoying a spike in occupancy figures. Above, the Hilani Resort on Oahu. Call the hotel. Most hotel room managers, or HRMs, are authorized to negotiate for available space at their properties.

There is no better contact an agency can have than the rooms manager at a top-rated hotel or resort.

Some agents go so far as to schedule city visits to personally meet with the rooms managers.

A face-to-face meeting with six or seven HRMs in one day can go a long way toward providing an in-house contact who can make you look good.

Sometimes, in the rush to find deals for our clients, we forget that hotels often have special offers that are known at the front desk but haven't reached the toll-free service or the Internet site.

Richard Turen is an industry consultant and travel agency president. Contact him at [email protected].

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