CAMARILLO, Calif. -- World Key, the new agency network based here,
signed 250 travel agencies across the country in the first phase of
its start up.
Another 1,400 agencies are being reviewed to determine whether
they meet membership criteria, said Graeme Clark, the former AAA
senior executive who became World Key chief executive officer early
this year.
"We're very pleased with the initial group," he said. "They
cover 36 states and Washington, D.C."
The company also hired the Yesawich, Pepperdine and Brown agency
in Orlando, Fla. to create a consumer advertising campaign
introducing the agency network.
The campaign, planned for cable TV in the fall, is expected to
cost $50 million, including $20 million in cooperative help from
suppliers, said Clark.
Under the World Key business model, agencies receive an
exclusive World Key territory, $1,000 in cash to pay for signage
and branding and stock in the company, which has filed with the SEC
for an initial public offering.
Clark said World Key is well on its way to its goal of 2,500
agencies nationwide, which is the company's limit.
That would make World Key one of the largest agency networks,
but no where near the industry's largest, Vacation.com, with more
than 9,000 members.
The other new players in the agency network arena, Vacation.com
and rivals 1,400-member ByeByeNow.com and 2,700-member
Travelbyus.com, started by acquiring agency groups.
World Key is the only recent firm to start an agency network
from the ground up. Clark said World Key is attracting agencies
from other networks, many attracted by the prospect of stock
ownership in a public company.
"If you belong to the other groups, you don't get any benefit
from the profits if they are sold" or from rising value of the
company, if it goes public, said Clark.
The agencies which have joined World Key are small to mid-sized
leisure firms -- the average sales volume is $1.8 million -- with
strong emphasize in cruise and tour sales.
Just as quickly as its network is growing, World Key is rapidly
ramping up its staff, Clark said.
The firm recently hired Sharon Symons, former Trafalgar Tours
regional sales director, as chief operating officer; Terri Burke,
former Holland America director of national accounts, as senior
vice president of product development; and Deane Motis, former
Cruise West director of national accounts as vice president for the
northwest, based in Seattle.
The company divided sales and support efforts into east, central
and western sales regions, is establishing support offices in Los
Angeles, Chicago, New York and Orlando, and is hiring 15 to 18
district directors to work with agencies in their regions, Clark
said.
World Key is a subsidiary of TravelnStore.com, a Camarillo,
Calif.-based company founded by travel agency and wholesaler owner
Jim Tyner.
Once the IPO for TravelnStore.com is complete, which could be in
a few weeks, the company will be owned 25% by the public, 50% by
the management and 25% by the agency members.
Each agency member receives 2,000 shares of TravelnStore.com
stock, vested 500 shares per year over four years.
The price-per-share at the IPO has been set at $9.50 per share.
World Key forged preferred relationships with 50 tour, cruise, car
rental and other suppliers, but is not ready to announce those
deals, said Clark.
Part of the firm's strategy is take inventory risk with the
suppliers, selling World Key customized cruise and tour departures
and specials available to consumers only through the agency
network.
World Key has also contracted with Trams and a database
marketing company and is requiring members to migrate to common
back office accounting and database marketing systems. Agencies
will be linked through an intranet.
There are no plans for a network-wide CRS contract for
members.
World Key's review for membership includes considering only
those agencies with a track record of strong cruise and tour sales
with preferred suppliers, Clark said.
"In a typical consortium, 25% of agencies represent 75% of the
sales. We want those 25% that are making those sales," he said.