Under the new ownership of host agency InteleTravel, Hickory Global Partners stands to become the "consortium of the future," poised to capitalize on the blending of corporate and leisure travel, said InteleTravel president James Ferrara.
"This is lifting our gaze and looking at more than just the challenges of this month and this year but looking at where the industry is going and the role a consortium can play in the future," Ferrara said. "And it is crafting a new kind of instrument, this consortium of the future."
InteleTravel, No. 24 on Travel Weekly's 2022 Power List, earlier this week said it had acquired the historically corporate-focused Hickory, which will operate as a wholly owned unit of leisure-centered InteleTravel.
Ferrara and Hickory president Chris Dane believe this is the first time a host agency has acquired a consortium.
The move came about after Dane approached Ferrara about growing and investing in Hickory, discussions that led them to recognize a need in the industry.
"In this new world, post-pandemic, we are not going to have silos of corporate travel and leisure travel but instead address a new blended trend in the marketplace by providing a resource for business travelers and the companies that serve them, where you could have all of your business supported in one place," Ferrara said.
Benefits for all members
For Hickory members, Dane said the acquisition would be additive. While they will still have the same programs and services they do today, that suite of benefits will grow under InteleTravel. That includes a new leisure offering for Hickory members, powered by InteleTravel.
"On the one hand, it's business as usual, but on the other hand everything that we're doing is absolutely additive to them," Dane said.
Future programs will benefit both the consortium and the host agency. Hickory will create a business travel education and certification program for InteleTravel's advisors, and its staffing solution will be expanded to provide leisure travel fulfillment. InteleTravel will funnel corporate leads to Hickory members.
Dane also pointed to opportunities for InteleTravel advisors to expand into corporate services, especially at the small- and midsize enterprise level.
Business travel has largely changed, Dane said. The typical business traveler before the pandemic would arrive in a destination on a Monday or Tuesday and leave Thursday. Now, though, they are arriving later in the week and staying through the weekend.
"The dynamics at the hotel level have changed dramatically," he said. "That gave us reason to go say, 'OK, how do we add value to this moving forward?'"
Over the years, InteleTravel's advisors have successfully sold corporate events and groups: In 2022 they booked 200 corporate groups between several hundred thousand dollars and $1 million, which Ferrara called "almost by accident." They have never had formal support in corporate bookings, he added, lacking the proper product mix, supplier relationships and specific tools and technologies.
"Now, we'll be able to," he said. "Blended travel as a sales and earning opportunity for advisors is a huge outcome of this deal. Our agents will, for the first time, address this huge market."
The two organizations will also enjoy the benefits of combined purchasing and negotiating power and shared resources, Ferrara said.
Benefits for Ensemble, too
The acquisition of Hickory does not affect InteleTravel's Ensemble membership. The host agency, Ensemble's largest producer with a record $529 million in 2022 sales, remains an Ensemble member, and Ferrara sits on Ensemble's newly created member advisory council.
Ferrara said Ensemble stands to benefit from the acquisition, which will increase InteleTravel's business with the consortium.
"Since our role is going to bring leisure programs to Hickory, those leisure programs will include benefits from Ensemble," he said.
Hickory last year made an unsuccessful bid to purchase Ensemble, which was ultimately acquired by Navigatr Group.
Charuta Fadnis, senior vice president of research and project strategy at Phocuswright, said the acquisition appeared to be an "evolution."
"InteleTravel and Hickory are combining their businesses specifically to take advantage of post-pandemic traveler behaviors," Fadnis said.
While blended travel isn't new, it has been trending, particularly among U.S. travelers from ages 18 to 34, she said. It also takes different forms: someone working remotely from a destination (a "digital nomad," Fadnis said), a leisure traveler working remotely while on vacation or a business traveler adding a leisure component to a work trip.
"So, there is plenty of opportunity and the combination of a leisure-focused host agency and a corporate-focused consortium will, in theory, bring benefits to both," she said. "But synergies on paper can be hard to realize and as with any buyout or merger though, the degree of success will depend on how well they execute on their integration plans."
What's behind the deal?
Industry consultant Bob Joselyn said he suspects the acquisition was motivated by something other than blended travel: air overrides.
Corporate travel-focused businesses and host agencies have been "increasingly challenged by yield" in recent years, Joselyn said, and both fields are competitive.
Many hosts do not share back-end overrides from suppliers with their independent contractors, so Joselyn said he would guess that Hickory's overrides as a new income source could have been a motivator for InteleTravel.
Joselyn also doesn't "see the big upside" in the mutual benefits Dane and Ferrara anticipate in blending leisure and corporate.
While giving InteleTravel's leisure advisors access to corporate tools adds value, and vice versa with Hickory, he said most corporate agents are uninterested in leisure, and most leisure agents don't want to fulfill day-to-day corporate requests.