Selling a travel agency is a major step, but it is one
option that a number of retailers are no doubt considering in the
wake of the latest airline commission cuts. In the following
report, Steve Kingsbury recounts his and his wife's experiences
selling their business, Going Places Travel of Boston, after
commission caps were introduced in 1995.
On July 1, 1996, my wife, Marilyn Wexler, and I sold our
Boston-based agency, Going Places Travel, to Direct Travel,
headquartered in New York. After opening in 1985, we built Going
Places into a profitable $10 million agency. In February 1995, when
the first airline caps were imposed, it was obvious to us that,
given the growing threat of bypass and -- we believed -- inevitable
future commission reductions, ours would become a fee-based
We asked ourselves if we were ready to borrow money for the
technology (and the personnel to run it) that a fee-based industry
would require and if we were ready to put in even longer workdays
to manage a more complex business. We also have two small boys who
already were not seeing enough of their mom and dad.
After much soul-searching, we decided to sell for economic and
lifestyle reasons. We believed a larger agency would have the
resources to thrive in a business environment that was about to
evolve rapidly and, we felt, merging with such a firm was the way
to gain long-term job security for ourselves and our staff. It was
not an easy decision. However, having made it, finding a buyer was
not as difficult as you might think.
I initiated discussions with some prospects locally. I also
began responding to the solicitation letters I received
periodically from brokers, specifying that I was only interested in
large, privately owned agencies that recognized the value of
leisure travel and independent commissioned agents.
In this way, I found a broker whom I trusted. He introduced us
only to quality buyers and to companies that met our criteria. He
brought us together with Herb Edelberg, president of Direct Travel.
The company met our needs, but beyond that, Marilyn and I had an
immediate instinctive feeling that we had found a man of honor and
integrity. This became as important, or more important, than the
operations of Direct Travel. Then the fact that he offered us a
package that was fair and generous and that included long-term
management contracts sealed the decision. Our sale provided for a
payout to cover a period of years, with the total to be related to
the agency's success in that time.
All prospective buyers were interested in continued involvement
by Marilyn and me, mostly for two or three years. Direct Travel
offered a much longer-term relationship. It also was important that
we and our employees received increased benefits.
We retained two additional experts to help us conclude and close
our sale, an industry consultant to guide us through the selection
and negotiation process, including analysis of our options, and a
travel attorney to handle the legal issues. They provided the kind
of professional assistance that I would recommend to anyone selling
The transition was not easy. When selling, there is a need to
switch gears from being an owner to being an employee. But we
appreciate that we work a normal work day now, with less pressure,
and we believe the future is promising with Direct Travel's
Marilyn is Direct Travel's leisure manager for New England in
the Northeast, and I have become a computer project manager. I am
able to work at home, which is extra meaningful for us because our
children are young.
Each owner has to do an analysis of what may be best for his or
her own business and personal situation. In light of today's
circumstances, we do not believe the company we founded would have
survived intact. Marilyn and I have no regrets, and we believe we
have made our future as secure as one reasonably can.