The merger of two industry behemoths, Apple Leisure Group
and the Mark Travel Corp., will bring increased efficiencies to the combined
company, said CEO Alex Zozaya. He also predicted it will mean better support
for agents in the form of products, marketing and technology.
The merger has been a long time coming, according to Zozaya,
with conversations having taken place throughout the years. It finally came to
fruition and was announced last week. Zozaya will head the combined entity,
which will keep Apple's and Mark's existing brands intact under the umbrella of
Apple Leisure Group.
Zoyaya called the merger "so obvious and so natural."
"We actually spoke about doing this a long time ago,
but for one reason or the other, we never had a chance to really do it in a way
that we were ready at the same time [Mark Travel owners] the La Macchia family
was ready," he said. "But of course, it made sense to do this merger
for many, many years."
In late 2016, Apple Leisure Group was acquired from Bain
Capital by KSL Capital Partners and KKR. The two firms will continue to be
majority stakeholders in the combined entity, Zozaya said. Apple Leisure Group
is likely to phase out the Mark Travel Corp. name over time, he said.
Mark Travel Corp. and its sister company, Trisept Solutions,
also part of the merger, are subsidiaries of La Macchia Enterprises. Mark
founder and CEO Bill La Macchia as well as chief engagement officer Bill La
Macchia Jr., will remain involved with "a very significant stake of
ownership in the holding company," Zozaya said. They will also join its
The merger, expected to close in the second quarter of this
year, is subject to regulatory approvals.
Industry experts said there are a number of benefits the two
companies are likely to realize post-merger.
Tom Botts, the head of commercial business for Uplift who in
a previous position with Miraval worked for KSL, said the companies do share
similarities, but they also have some "really big differences." For
example, Apple has a large hotel management division, while Mark Travel is
strong in technology.
"You end up with this kind of interesting dynamic,"
Botts said. "If you think about these hotels that are managed by Apple
under the [AMResorts] brands, assuming that Mark Travel will feed those brands
with wholesale customers in the same way that Apple does, those hotels are
looking at a pretty significant shot in the arm."
That will help feed the combined entity, he said.
Zozaya said that today AMResorts is the biggest part of
"They don't have hotels," he said of Mark. "So
it also makes a lot of sense for them to be able to sell our hotels in the
destinations that they're already selling."
Botts also pointed out that Apple and Mark have been "notorious
industry competitors" over the years.
"For them to come together, I don't want to call it
quite Hatfields and McCoys, but it is certainly an interesting dynamic that's
going to change the industry, because they have been so fierce and competitive,"
Jack Mannix, founder of Jack E. Mannix & Associates,
agreed that the "two behemoths" have been competitive.
"Certainly there must have been some chemistry there
personally as well as from a corporate standpoint" he said. "Otherwise,
I don't think they would have gotten together."
He said that the combined entity will enjoy a number of
"The obvious thing," Mannix said, "is the
proverbial economies of scale, certain things in terms of efficiencies in
accounting and other things like that -- that's sort of the garden-variety
stuff that's a benefit typically to these kinds of mergers."
Zozaya said Mark's development of technology was also a big
draw to Apple, especially its Trisept Solutions, which offers several different
products: Synapse, an operating platform with merchandising solutions for
suppliers like airlines and hotels; and its agent-facing solutions, Vax
VacationAccess, a leisure travel marketplace, and Xcelerator, an agency
"That was a very important part of our decision,"
he said. "They have a much better technology solution than we do in Apple
Apple's acquisitions over the years, most notably Travel
Impressions and CheapCaribbean.com, forced the company to invest a lot into
technology to combine all its brands on a single platform. Zozaya said a lot of
technology was outsourced over the years because the company was growing so
quickly it couldn't wait to develop its own.
In the future, the combined Apple Leisure Group will look to
Trisept Solutions for its technology resources.
Henry Harteveldt, founder of Atmosphere Research Group, said
Trisept Solutions was key to the merger.
"Essentially, Apple Leisure Group bought Trisept
Solutions and got the rest of Mark Travel as a gift with the purchase," he
There is indeed "enormous value" in Mark's leisure
products, Harteveldt admitted, with brands like Funjet Vacations, United
Vacations and Southwest Vacations.
In the Hot Seat
Apple Leisure Group CEO Alex Zozaya explains the logic behind the company's merger with Mark Travel Corp. Read More
"But much of the value in this acquisition is in
Trisept," he said. "Trisept has been investing in a variety of
technology enhancements, including improvements that incorporate components of
artificial intelligence, that give it a meaningful advantage in the
marketplace. Along with the technology are the IT professionals who work on the
software. So, in a small way, this is also an 'acqui-hire' move."
Robert Cole, a former Mark Travel vice president who is now
Phocuswright's senior research analyst for lodging leisure travel, agreed that
Trisept will be valuable for Apple.
"The important part of Trisept really is VAX because
they connect a lot of tour operators to a very, very large number of travel
agencies," he said.
Still, Cole said Harteveldt might be underestimating the
strategic importance to Apple of brands such as Southwest Vacations and United
"If you have that type of volume, you can talk with
suppliers more effectively," Cole explained.
For example, he said, Southwest Airlines has a strong
presence in Las Vegas.
"If you have a monstrous group like MGM that has 40,000
rooms in Las Vegas to fill every night, Southwest Vacations becomes pretty
Zozaya said the merger will be good for the industry as a
whole, giving agents the option to sell more complete vacation packages. Agents
can expect to see the same brands going forward.
"I think that reflagging and playing that game is
risky," he said.
Agents will benefit from back-of-house efficiencies, he
said, as the combined companies will have more resources to put into agent
technology, training and marketing.
Agency groups viewed the merger positively.
Pam Young, senior vice president at Travel Leaders Group,
said, "The prospect of expanded product lines, new technologies and
enriched partnerships are all positive changes we'd be happy to pursue, as the
result would be good for our travel agents and their clients."
Cece Drummond, managing director of destinations and
experiences at Virtuoso, agreed.
"Industry developments that benefit travel advisers are
positive for Virtuoso, and this has the potential to increase efficiencies for
advisers and sharpen their competitive edge," Drummond said. "If this
results in access to additional products for our advisers as well as better
services and technology improvements, it will be good news indeed.
This story was updated on Monday with comments from a Phocuswright analyst.