TORONTO--The North American subsidiary of U.K.-based Airtours
bought Vacation Express of Atlanta--one of the largest tour
operators in the Southeast--for $24 million.
The subsidiary, North American Leisure Group (NALG) based here,
said Vacation Express will carry 100,000 passengers this year.
Kevin Hernandez, the former co-owner and managing director of
Vacation Express, will become its president.
He said Vacation Express will "conservatively" expand its U.S.
gateways and its destination products. "The most logical
[destination] expansion would be to the Caribbean," Hernandez told
Travel Weekly.
Vacation Express became NALG's third large U.S. subsidiary,
joining Sunquest Holidays and Suntrips, both based in California.
The parent company, Airtours, is a Manchester, England-based public
company that carries 8.7 million passengers each year. It owns and
operates tour firms, travel agencies, hotels, cruise ships and an
aircraft fleet. Carnival Corp. owns 29.6% of Airtours.
Hernandez called Vacation Express a good match for NALG because
the tour firms have similar air-inclusive charter products,
strategies and brand-name strength.
Vacation Express, founded in 1989, sells packages from nine
gateways in Georgia, North Carolina, Washington, Tennessee, Ohio,
Kentucky and Florida. Its primary destinations are Cancun, Cozumel,
Aruba and Costa Rica. The firm's other two former co-owners, Meg
Deeb and Grant Cookson, will have management roles still to be
determined.
"Our strategy has been to leave brand names operating as is in
their respective markets," said an NALG spokeswoman. "The big
advantage is the increase in buying power and bringing those
efficiencies to the value of the product."
In a statement, Leo Desrochers, NALG president and chief
executive officer, said the acquisition of Vacation Express "will
position us for growth in the Southeast, a large leisure market
where we see considerable potential."
Vacation Express uses three charter companies: Falcon Airlines
of Miami, United Parcel Service of Louisville, Ky., and Allegro
Airlines of Cancun, Mexico. NALG entered the U.S. in late 1996 by
founding Sunquest Holidays in Simi Valley, Calif., and, in spring
1997, acquiring Suntrips of San Jose, Calif. The two operate
charters to Hawaii and Mexico from gateways in California and
Colorado, with Allegro Airlines one of the main carriers. NALG also
includes three Canadian tour operators, Alba Tours, Sunquest West
and Sunquest Vacations, with the Caribbean and Mexico a focus.
With the sale, Vacation Express will gain the advantage of
economies of scale of the larger company in negotiations with
charter airline companies, an important factor as fewer aircraft
are available for charter, Hernandez said.
He said that he and his partners decided to sell because they
faced a "huge investment" decision in technology if they remained
independent.
NALG also recently hired Gavin Scott, formerly chief executive
officer of Toronto-based Sunflight Holidays, for the new position
of vice president of corporate development. Scott will work with
the North American tour operations on identifying integration
potential.