TSI Cements Status With 7th Acquisition

DELRAY BEACH, Fla. -- With the acquisition of Gold Coast Cruises, a cruise-only agency, Travel Services International (TSI) consolidated its position as the industry's largest distributor of cruises, with projected 1998 bookings of $400 million, the firm said.

TSI bought Miami-based Gold Coast for $10.5 million. It is the seventh cruise firm to join TSI's portfolio.

TSI chairman Joseph Vittoria, who formerly headed Avis Rent a Car, said Gold Coast's expertise in television promotion added a "new dimension" to TSI's nationwide cruise marketing strategy. Gold Coast, which has been in business since 1974, advertises via cable and satellite television commercials in all 50 states, Canada, Mexico and the Caribbean. Advertisements are featured on the Travel Channel, Comedy Central, E! Entertainment Television and Food Network among other cable networks.

TSI, since being launched as a Nasdaq-listed company last July, has emerged as a diversified leisure retailing organization, largely in cruises, air consolidation and European car rental reservations.

Besides Gold Coast, TSI's cruise retailers include CruiseOne, CruiseWorld, Cruise Fairs of America, Cruises Inc., Cruises Only and Ship 'N Shore Cruises. Under TSI, the agencies continue to be managed individually.

According to Tony Persico, chairman of CruiseOne and CruiseWorld, and a member of TSI's cruise and management committees, each of the retailers in the portfolio was selected because of its specialized niche within cruise retailing.

Still lacking in the cruise portfolio, he said, is a major presence on the Internet. But under development, Persico reported, is an Internet reservations engine that will combine air and cruise bookings. The technology, developed by a software company, Trax, which TSI acquired last year, is being adopted for cruises, Persico said.

Although TSI's cruise portfolio contains a conventional "brick-and-mortar" agency chain in CruiseWorld, Persico said, the thrust of TSI is on new distribution channels. "The problem in our industry is that the amount of money available to a retailer is very limited," he explained. "At the same time, what is absolutely essential for the viability of a retailer is the need to make the phones ring. That is why you're dooming yourself if you spend your limited money on infrastructure [rent and payrolls] rather than making the phones ring."

Persico said that TSI is depending on cruise lines to provide marketing funds, but the company will not commit itself to exclusive preferred-supplier arrangements.

Noting that the cruise market is still in its infancy, with only 10% of Americans having taken a cruise, Persico said retailers should concentrate on overall expansion rather than market share battles. "You're wasting your time trying to slice up the pie for a bigger piece," he said. "The market is too small now.

"First, we have to become more significant" as a vacation option, he said.

Cruise retailers in Travel Services International's portfolio include: