It became clear to a lot of travel agents at some point in the last decade or so that to survive in the future, they must specialize. The disappearance of airline commissions and the emergence of the Internet made the phrase "full-service travel" sound quaint and increasingly curious, and consumers began to show a preference for agents who brought in-depth knowledge to the table.

The problem with specializing is that it becomes difficult to build appreciable scale. For most agents, the decision to specialize was also a decision to downsize. Owners of many agencies that were in the $2 million-to-$5 million (gross bookings) range are now profitable at $500,000 or less, with fewer or no employees.

While that was occurring at one end of the scale, megaretailers, dominated by corporate travel and Internet agencies, were getting bigger -- and fewer. Every year for the past five years, our annual spring Power List, which profiles travel agencies that have gross revenue over $100 million, has gotten shorter. It's not that less travel is being sold; it's just that whenever a mega-agency buys or merges with another, we lose a listing.

I was delighted to be notified recently that a new entry will be on the list next year. A little over four years ago, I wrote a column titled "The Death of Full-Service Travel." It reported how the children of the owners of a San Diego-area agency, Full Service Travel, hoped to turn around a dying agency.

Two brothers, Brad and Van Anderson, realized that "full service," once the engine and pride of the shop, was pulling it down. Like many agents in 2002, they were dealing with the aftershocks of 9/11 and mounting pressure from online agencies. They were scared that their eight-branch, $40 million business, renamed Anderson Travel and Cruises, would go broke.They did not want to downsize. They wanted to grow. But they had to come up with a model that would allow for specialization and growth.

Their approach, which was still a work in progress at the time of my first column, was to build proprietary software that would enable their agents to make bookings, track vendor sales in real time, monitor vendor promotions and exploit customer preferences to increase productivity and profitability. (This brief description of their Agent Power software is woefully inadequate. It is truly a wonder of organization and efficiency.)

They became a host agency, taking bookings from 200 agents, each a niche specialist. They again changed the name: It is now America's Vacation Center. When consumers call or e-mail AVC, they are routed directly to the agent whose specialty is linked to the client's preferences.

They have rolled out some other innovative programs, luring a university communications professor to become their full-time sales trainer and working with suppliers, destinations and the Travel Institute to create specialist courses just for their agents.

And although they have achieved considerable scale -- they expect close to $200 million in sales in 2007 -- they won't rebate. "There are so many promotions out there at any given time that you don't have to rebate," Brad Anderson said. "Group amenities, regional specials, passenger offers, bonus commissions; our system tracks them all. Rebating comes from frustration about not being able to close a sale. But we feel we have plenty of arrows in our quiver."

The Andersons' achievements are encouraging, not least of all because their success is built on technology and the efforts of experienced agents, a winning combination for a firm whose goals were specialization and growth.

Here's what Brad Anderson said in my column four years ago: "(The travel agency business) doesn't have to be a bad business. It's just different than it used to be. And there's tremendous opportunity for people who are willing to act differently."

The phrase "It's different than it used to be" applies as much today as it did then, as does the potential for "tremendous opportunity." I'll be interested to check in on the Andersons in another four years to see how their model has further evolved. And to see, four years hence, what new types of agencies have been developed by other "people who are willing to act differently."


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