Pay Cuts Spur Florida Agency to Buy Rival

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CORAL GABLES, Fla. -- Carlson Wagonlit Travel/Around the World Travel, the largest agency in South Florida, reached an agreement to acquire Atlas Travel Management here for an undisclosed sum. Both agencies said airline commission cuts prompted the deal, which is expected to be completed by Dec. 15.

Around the World reports annual billings of $100 million. Atlas, an affiliate of Hickory Travel Systems with sales of between $15 million and $18 million, said it is the third-largest agency in South Florida. Around the World has 210 employees, Atlas 40.

Around the World president Simon Hassine said he is seeking more agency purchases to expand billings to between $150 million and $160 million. "Absorption is our strategy," he said. "We believe that regional volume power is the savior of regional agencies. The bigger we are, the more we can work with carriers and make them understand that we can move volume." The agencies are located within a half-mile of each other in Coral Gables, an affluent Miami suburb.

Around the World recently doubled its four-story headquarters office space here to 30,000 square feet and in mid-December plans to add another 10,000 square feet of space in Boca Raton, supplementing offices in Coral Gables and in Fort Lauderdale.

Atlas co-owner Tamir Ran-kow, who is ASTA's Area 14 director, said the decision to sell was in response to pressures from commission cuts. "Consolidation is a natural trend in many industries," he said, adding that the commission cuts "had undermined the agency's control of its profit margins."

The executive said another factor in the sale was his agency's competitive disadvantage to Around the World. Rankow said that he anticipates moving "all of our customers and our core employees to Around The World." Rankow said he had dealt with the 1995 commission caps by developing the agency's business in the meetings and incentives markets, through Atlas Motivations.

That company, which is not part of the sale, has allowed Atlas "to grow in an area where we are in full control of our costs," Rankow said. The executive said that he will continue to build Atlas Motivations, moving the firm into the offices of Around the World and collaborating in joint ventures with that company. No decision has been made with regard to the future of Rankow's third company, Corniche Travel Consultants, a super-luxury agency that is not connected with Corniche Travel of Los Angeles.

Hassine was an American Express executive in Paris and Rome before joining American Express in New York in 1960. In 1962, he relocated here to start Around the World. The agency became a Carlson franchise five years ago. Rankow purchased an interest in Atlas in 1982 with his partner, Neal Haber, who is vice president of operations for the agency. Atlas affiliated with Hickory in 1993.

Besides heading Atlas Motivations, Rankow will become vice president of industry affairs for Around the World. Haber will be associated exclusively with Atlas Motivations. Rankow said he expects that about two-thirds of Atlas' 40 employees will join Around the World. Around the World recently bolstered its investment in automation, becoming one of the first agencies to take delivery of Sabre's Business Travel Solutions.

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