Travel Weekly Digital Edition

TRAVEL WEEKLY’S

P _LO 2 ₀_IW_SE 0 _TR Among these trends are several that are not only helping the big get bigger but are helping more agencies get big: • Medium-to-large agencies are affiliating with global giants such as HRG, BCD and American Express. In addition, new entries such as America’s Vacation Center (No. 52) are building large companies on network and franchise models. • Globalization is enabling regional agencies to affiliate with global companies and associations to establish an international presence. • Hosting is fueling growth at many agencies, which are capturing significant sales through independent travel sellers. • Through a combination of hosting and 7 technology, many agencies are able to produce higher sales with a smaller staff. But the forces at work in travel are not a rising tide that is lifting all boats. There remains a widening gap between the Big and the Truly Big, with a $6 billion space now separating the sales of Nos. 7 (Orbitz Worldwide) and 8 (AAA). And the Truly Big did indeed get bigger: American Express Business Travel, the No. 1 seller on the Power List, increased its sales by 17.5%. Carlson Wagonlit Travel (No. 2), which acquired Navigant International in 2006, reported a 33.7% increase in sales.

riding on trends that show no sign of stopping.

$732 million with 436 employees. Tzell (No. 17) added $100 million in sales year over year but added only 45 employees.

One reason for some of those numbers is the growing trend toward hosting outside agents, at-home travel sellers or brick-and-mortar agencies that don’t have ARC appointments.

Travel and Transport (No. 13) reported hosting 22 outside travel sellers who produced $5 million in sales; Ovation Travel Group (No. 24) reported $62.5 million in sales from outside agents; and Travel Store (No. 32), reported that $59 million, nearly a quarter of their total sales, came from outside agents.

Sellers specializing in business travel management continued to dominate the Power List overall, but six of the companies in the Top 10 are primarily sellers of leisure travel. (For more on leisure agencies, see story, Page 38.)

BY HARVEY CHIPKIN

Familiar trends

Mergers remain a popular way to bulk up and, as in previous years, the Power List includes agencies that have recently combined. In these cases, the

Uniglobe Partners (No. 40) entity among them, the ranking is based on what the joined company would have realized in sales in 2006.

Along with consolidation came more spin-offs. Notably, Travelport was spun off from Cendant to become a purely travel-focused company.

Other trends continued or accelerated. For instance, the giants in online travel enjoyed significant gains in sales, though not at the explosive growth rates of recent years. Sales at Expedia (No. 3), jumped 10.3% to $17.2 billion. Travelocity (No. 6) enjoyed a heady 35.8% increase, to $10.1 billion.

Orbitz Worldwide, which is the travel sales division of Travelport, is No. 7. Priceline moved up a notch to No. 9.

Many agencies saw large leaps in sales with little change, or even a drop, in the number of employees. For instance, Travizon (No. 15), increased its sales from $660 million to

Questions

The Power List is all about size and represents an effort to rank the nation’s top travel sellers in terms of the total dollar volume of annual sales. That simple starting point, however, quickly leads to complexity. For example:

• What is a travel seller? For this list, Travel Weekly defined travel sellers as intermediaries that sell travel products through any medium (electronic, telephone, etc.) directly to consumers.

• Why are some companies treated as single entities and others as conglomerates? That depended mainly on whether a company had a unified ownership and/or corporate structure.

Travelocity, for

example, is part of a larger entity (Sabre) but reports its sales separately. Carlson Wagonlit is half-owned and Carlson Leisure Group is fully owned by Carlson Cos., but they operate separately.

AAA is treated as one entity because it has a national structure and is a nonprofit organization. While individual AAA clubs have a great deal of autonomy, they operate collectively under a national brand.

Looking ahead, it will be worth watching to see if the affiliate-based companies will be able to maintain their growth rates, who will gobble up whom and who will affiliate with whom.