If you own a physical travel agency in America, it is
possible that, without seeking change in affiliation, your signage might have
added, and subsequently removed, the logos of Ask Mr. Foster, Carlson Travel
Network, Carlson Wagons-Lits Travel and Travel Leaders Group.
And, on Friday, you may have called your sign maker again,
this time to replace “Travel Leaders Group” (No. 7 on Travel Weekly's 2019 Power List) with “Internova Travel Group.”
Then again, you may have just added “Internova” and retained
“Travel Leaders Group.”
Or, your agency’s journey on the road to Internova
affiliation or ownership may have included business cards that once included
the brands Action 6, Cruise Shoppes, IT Group, Cruise Brothers, Vacation.com,
Travel Planners International, Seamaster Cruises, Cruise Holidays, Space, TIME,
CruiseLink, GEM, Aura, Crown, Consolidated Travel Services, Travel Associates
Network, Navigant, Travel Leaders Corporate, Stevens Travel Management or
Results Travel.
That list, incidentally, is not exhaustive.
However, Friday’s change of name for the country’s largest
collection of travel agencies -- 65,000 total agents, 57,500 of them U.S.-based
-- is not, as was previously the case, a relabeling to reflect merger or
acquisition activity.
In a wide-ranging interview with Travel Weekly, Internova
CEO J.D. O’Hara explained the reasons behind the renaming, how the company is
being reorganized and its potential impact on individual agents, the outlook
for future acquisitions, the possibility that some agencies might not make it
through the current crisis, Internova’s relationship with private equity owner Certares
and the other travel-related companies that Certares has investments in, and
why the name Travel Leaders Group remains for the division above brands
primarily serving leisure clients.
But first: Why Internova, from the Latin meaning “among the
new?” The name, O’Hara said, did not come about as a result of focus groups or
from recommendations by a big-league branding firm. Rather, it already had
existed within the company as something of a placeholder, a label created to
serve a technical, legal organizational function, and was simply being
repurposed. “I wish I had a better story, but there’s not a lot of deep meaning
behind it,” he said.
The need to rebrand the company was driven by the
recognition that the name Travel Leaders Group, adopted after acquiring an
agency organization by that name, was not always a good fit with companies
outside leisure travel, though he strongly believes it remains relevant to
leisure brands. Internova has retained it as the name of the leisure division.
And beyond that, O’Hara saw benefit in realigning the
company into divisions reflective of the differing needs of agencies based on
the types of clients they served.
The resulting reorganization, O’Hara said, will facilitate
the sharing among agencies with similar goals the support functions, tools,
resources and services that are currently scattered throughout the
organization.
“The idea is to have a focused set of experts over top of
the businesses with commonalities and have a clearer home for all advisors,
agencies and travelers,” he said.
“We’ll pull together those resources and processes under one
umbrella to solely focus, for instance, on the leisure agent,” he continued. “We
want to leverage the knowledge that we have from the Travel Leaders Network and
apply it people in CruCon, as an example. We want to leverage the knowledge and
know-how and talent that we have at CruCon and enable it to empower Nexion
agencies. We’ll do the same for the corporate agent and the same for the
independent contractor, et cetera. The idea is to enhance their experience
today, and ultimately add arrows to their quiver to better serve their
traveling client.”
Asked whether access to the same toolkits might blur
differentiation among the brands within a division, O’Hara said that
differentiation remained strong in terms of the operating structures -- franchising,
hosting, consortium affiliation -- within the leisure division, as an example.
Different brands, he said, permit agents to work within a business format that
best suits their needs.
Much of Internova’s growth has been organic, but its history
reflects a decades-long buying spree. Downturns such as the one the industry is
currently in can provide opportunities for acquisitive companies to pick up
financially distressed competitors.
Internova is owned by private equity company Certares, whose
CEO, Greg O’Hara, is J.D. O’Hara’s brother. (J.D. had worked for Certares
before moving to Travel Leaders Group.) J.D. O’Hara said he couldn’t comment on
what Certares might or might not do regarding mergers or acquisitions, but that
Internova has its own M&A team that presents its assessments and
recommendations to its board on a case-by-case basis for approval. “We always
have our ear to the ground, [but] I would say at this moment there’s not a
whole lot of activity going on,” O’Hara said. “We don’t have anything planned.”
Among Certares’ investments is a 50% stake in American
Express Global Business Travel (Amex GBT). Given the current crisis and
Internova’s rolling reorganization, is the time perhaps right to explore
synergies between Amex GBT and Internova’s considerable corporate travel
activity?
“Possibly,” O’Hara said. “My guess is there certainly would
be synergies, but these are very separate investments by Certares, with
separate management teams and even separate investors in some cases, and we
operate independently. I suppose there could be a case where there could be a
commercial relationship, but we’ve not explored that. They’re in a relatively
different market, looking at global, mega corporate clients. They’re all in on
that model. We’ve got a much more diverse business, and small-to-medium sized
corporate is just part of what we do.”
O’Hara said the timing of the reorganization and the
Covid-19 crisis was not by design, but the realignment will help the company
recover. “We will have a more streamlined set of processes. When travel
resumes, we will return to profitability much more quickly than we would have
under our previous structure. We’re more aligned for a speedy recovery.”
Speedy recovery, perhaps, for those who make it through the
crisis, but there are predictions that many agencies may close before people
begin traveling in earnest again. “I hope that’s not the case,” he said. “I
would imagine that [some agency closures] are likely, but in terms of a
percentage, I couldn’t tell you that. And even if hundreds of agencies
disappear, it’s a relatively small percentage of the pie.”
Might some sectors -- leisure, corporate, meetings -- be hit
harder than others in the coming months?
“Probably, though I couldn’t highlight what they are,” O’Hara
said. “We’re extremely bullish on travel as a long-term investment, and I have
no thoughts about getting out of one of those lines of business. But some of
these newly defined divisions will likely come back at different paces and
different trajectories.
“At the end of the day, the reorganization puts us in a
position of strength to come back more profitable and service-oriented to our
agents and offering a better product all the way around. This is something that’s
made sense for a long time. We’ve hemmed and hawed about carrying it out, but
we believe it’s the right thing, now more important than ever. While the timing
of my taking this position in January can be admired -- or, ‘condolences, J.D.’
-- I’m proud of the work this team has accomplished during a less than
desirable situation.”