Navigant. Sato Travel. McCord Travel. Rosenbluth International.

Those four companies all ranked high among Travel Weekly's Top 50 travel agencies in 2000. All were eventually acquired by other companies.

This marks the 18th year that Travel Weekly has compiled a listing of the largest agencies in the retail sector -- first as the Top 50, then beginning in 2004 as the Power List.

Over the last decade, a number of listees have changed or disappeared, usually through mergers and acquisitions, but quite a few have remained. Some survivors, such as American Express and Carlson Wagonlit Travel, have continued to dominate the top, while others, such as TravelStore and CI Travel, have ranked lower.

A number of 2000 listees have grown tremendously. Altour's sales soared from $150 million in 1999 to $809 million last year. Travel and Transport grew from $650 million to more than $1 billion.

And some on the 2010 Power List did not even exist back in 2000.

To get a feel for the changes that listees experienced over the past decade, we added a question to the Power List survey asking for perspectives about the last 10 years. We also interviewed executives, from companies that have remained on the list through the years as well as from a few newcomers.

While the big story over the last decade might be technology, it is certainly not the only element driving the industry's transformation.

This year's No. 1 company, Expedia, only came into existence in 1996, four years before the decade's first Top 50 (where it ranked No. 10).

Launched within a small division of Microsoft, Expedia was originally intended to be a "simple travel reference tool," according to the company, but its structure and mission have changed radically.

It was spun off from Microsoft, became a publicly traded corporation, was taken private as part of InteractiveCorp, then was spun off again.

Along the way, Expedia Inc. acquired other travel brands, including Hotels Reservation Network (later renamed Hotels.com), Hotwire, TripAdvisor and Classic Vacations.

Clicks and bricks

The Internet, of course, was a driving force behind Expedia's meteoric rise, but it also drove changes of various kinds for most other travel sellers, large and small.

In 2000, Adelman Travel had 70 dedicated on-site locations; today it has fewer than 20, while maintaining a 98% customer retention rate.

As the company noted, "Many of our existing customers have changed their service configuration to online fulfillment, while we are still providing VIP full-service transactions for executive travelers."

Not all growth occurred in cyberspace. Protravel has grown from a single location to more than 20 as it boosted sales from $75 million to a projected $600 million for 2010. The company opened one office in London.

Trading bricks for clicks, in other words, was no guarantee of success.

Alexandre Chemla, CEO of Altour, sees taking risks and adapting as the keys to growth over the last decade. For example, he said, "After years of seeing American Express as a competitor and even fighting them, we have become a partner with them, and that has been the best thing we have ever done."

Last year, Altour purchased a dozen American Express offices.

Frosch, a company relatively new to the list, said in its response that it "has transformed itself from a local agency to a national, diversified industry leader in the past decade ... through a combination of strategic acquisitions, organic growth and technology developments."

Hosting

One way agencies have grown is establishing relationships with outside travel sellers as many veteran agents closed shop and moved their operations to their homes. At Valerie Wilson Travel, according to the company's response, "We have grown strategically with branch offices, affiliate agencies and home-based agents."

CI Travel stated: "The development of telephony and hardware/software solutions has allowed us to keep good travel consultants we may have lost, through hiring many new home-based virtual consultants."

Balboa claims to have been a pioneer with its At-Home program: Since its implementation in 2001, the company said, the program has "been modeled by many in the industry."

America's Vacation Center shifted its entire business model to a hosting enterprise in order to compete. In addition to marketing and technology tools, AVC blocks space on cruises and tours and provides other services such as weekly commission payments via direct deposit.

"Back in 2000, we were Anderson Travel in Hawaii, a brick-and-mortar company," said Van Anderson, AVC co-president. "It became clear to us that the Internet was going to change everything. We jumped into technology to make the shift possible. It's all about the willingness to adapt and change."

Acquisition and consolidation

The big have grown bigger, and even some of the smaller have grown in an effort to survive at a time when more and more resources are needed to keep up with technology and globalization.

Travel Leaders Group emerged from a division of Carlson and, since then, has seen the acquisition of the TraveLeaders agency, from which the group eventually took its name. Two years ago, it also acquired Tzell Travel Group, another high-ranking Power List company in past years.

Chemla said that buying a $300 million company, the Travel Authority, in the tumultuous year of 2009 was risky, but it was typical of what Altour has done over the years to facilitate its growth. Similarly, Chemla said, he jumped at the chance to buy an entertainment-centric agency in Los Angeles years ago, although it was a risky financial move at the time. Entertainment is now a huge revenue driver and growth segment for the company, he said.

Travel and Transport has made a number of acquisitions, most notably Boston-based Abacus Travel, which enabled the company to expand into New England.

On the other hand, World Travel Inc. proudly boasts of growing substantially without acquisitions "by bringing new clients onboard and retaining our current client base."

But while the travel management business has trended toward big corporate enterprises, some families continue to run large companies. At Valerie Wilson Travel, the company planned for the future a few years ago when founder Valerie Wilson transferred nearly 50% ownership and company stock to her two daughters, Jennifer Wilson-Buttigieg and Kimberly Wilson Wetty, who also serve as company executives.

Transformative technology

While the Internet and back-office automation were beginning to play a role in 2000, it was in its infancy as far as travel management. Now, not only the Internet but sophisticated, high-tech tools unimaginable a decade ago are essential. For example, Omega Travel points to self-booking tools, travel-and-expense management solutions, enhanced fulfillment, quality control, risk management and worldwide support as all being central to its business.

"Technology also plays an increasing role in providing the most critical component of travel: secure systems and data controls," Omega stated. "Travel agencies have evolved from being vehicles that issue airline tickets and make hotel and car reservations to being full-fledged businesses charged with providing consultation and innovative solutions to customers worldwide."

Travel and Transport attributes much of its growth to technology, specifically the 2002 launch of its eTTek Solutions suite of products. Since the launch, the company has continued to add to the suite.

In recent years, online booking tools have become keys to success. World Travel Inc. has implemented Cliqbook by Concur, Rearden Commerce's Personal Assistant and Sabre's GetThere. A few years ago, the company said, online booking constituted less than half of 1% of total bookings. Now, that percentage has soared to a third of total bookings. As a result, the company now has a full-service Online Solutions department.

At Boeing Travel, which will soon become the travel department of Boeing and will no longer serve outside clients, online booking has achieved 93% adoption within the Boeing Co. and 50% overall adoption for non-Boeing business.

At World Travel Inc., "Our I.T. department has ballooned and is headed today by a [chief information officer] with 28 staff members."

Reporting has also become heavily automated. At World Travel, the company has created its own reporting Web portal known as WorldView Reports, using BusinessObjects 3.1 and Web Intelligence.

Atlas Travel hired its first chief technology officer in 2001 and since then claims to have "pioneered the custom e-invoice, automated client surveys, implemented Web-based reporting and more."

At America's Vacation Center, the company created proprietary software called Agent Power, designed to consolidate the entire workflow of affiliates into the system and serve as an agency operating system for leads, inventory, customer relationship management and dozens of other applications.

Interestingly, more than one company still sees the telephone as central to its success. Tom Spagnola, senior vice president of supplier relations at OneTravel, which has made the list the last two years, has a large call center in Las Vegas.

"We put the toll-free number on every page of our site," Spagnola said. "Our conversion rate is far greater in the call center than online."

Similarly, at Travelong, Bill Miller, senior vice president for strategic partnerships, said, "The call center is very important to us. We want customers to call us, because sales agents can convert and upsell customers a lot better than we can electronically."

Going global

Many Power List companies have thrived by becoming global, either through organic growth or through affiliating with global outfits like HRG or international networks like Radius. Omega, for one, has established its own Middle East offices in Bahrain, Kuwait and Qatar.

Travel and Transport points to its membership in Radius for the ability to "successfully service clients throughout the world."

AVC created Avoya Travel several years ago to reach out to Canadian customers as a step toward globalization.

Atlas Travel has hired its first executive vice president of global business development and started going after larger corporate accounts. To serve those clients, Atlas has partnered with agencies in key locations around the world.

Diversity or specialize

Some companies claim to have weathered the recession because they diversified. Atlas, for example, formed Atlas Meetings & Incentives in 2004.

At OneTravel, Spagnola said, "We are looking at ancillary revenue from theme parks, entertainment and a variety of other options."

Global Crew Logistics, whose niche is aviation (cargo and private aviation crews, etc.), appears on the list for the first time this year. According to CEO Jim Collins, that is because "we had kept a low profile in the past as we built our business. Now we are trying to expand into some mainstream corporate business and are looking to expand our portfolio."

None of these trends seems to be slowing down. It's all best summed up in a questionnaire response from CI Travel:

"As we exit the last decade, we can say that more change occurred in the past three years than in the first seven. It's a mobile world out there."

This report appeared in the June 28 issue of Travel Weekly.
To view the survey in its entirety,
click here.

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