This story originally ran in the March 7, 2019 issue of Travelweek magazine. To get Travelweek delivered to your agency for free, subscribe here.
TORONTO — Are the big players interested in buying smaller agencies? Well, it depends on who you ask.
While some agency owners might be convinced that their book of business is too small to attract the attention of a major retail group, at least a few of those groups beg to differ.
In this second installment of Travelweek’s 5-part series, we talked to high-profile retail organizations about how small-to-mid-size agencies fit into their expansion strategies.
Vision Travel Solutions is very much in growth mode and while it’s made headlines recently for bigger acquisitions, it’s interested in smaller agencies as well, says Vision President Brian Robertson.
“We are able customize the opportunities and ensure that all of the staff or independent travel advisors feel comfortable with Vision Travel. Whether they become a host agency or we acquire them, we are always looking for great travel agencies that fit with our culture and specifically our personalized approach to travel,” says Robertson.
Asked if Vision has seen an increase in the number of inquiries from agencies looking to sell, Robertson says: “Yes we have. And what is interesting is that many of the principals want to stay involved – which is not always what you might expect. They really want to stay in travel but not deal with the day-to-day management of the business. Many of the owners and managers of these organizations also have unique skills and experience that they can bring to make them and our company more successful moving forward.”
Robertson adds: “Regardless of our size, we believe that we need to remain accessible to our clients and flexible to their needs. Our team understands and embraces that concept and it has been the key to our success. We are not looking to dismantle the companies we acquire, we are looking to give them more tools and support to be more successful.”
UNIGLOBE Travel is also growing, and small to mid-size agencies “are absolutely of interest to UNIGLOBE as we are looking to expand our network of offices,” says Regional Vice President, Eastern Canada, Joel Kopstick.
Unlike the old days when it would sell a franchise and an agency would open up from scratch, over the past dozen years or so UNIGLOBE’s growth has come from existing agencies in the marketplace affiliating with UNIGLOBE under its Partner Agency Program.
Kopstick says he hasn’t seen an increase in the number of agencies who want to sell. “Mind you, as a Region, we are not in the business of acquiring agencies. That being said, a number of our franchisees and partner agencies would be very interested in purchasing quality agencies, particularly those with some corporate business.”
Maritime Travel meanwhile has doubled its size through acquisitions over the past 10 years. The company currently has about 115 agencies with a 50/50 split between Atlantic Canada and the rest of the country. “Our main expansion has been in B.C., Alberta and Ontario however we will look at and have purchased branches in other provinces,” says Gary Gaudry, President, Maritime Travel.
“We will look at any type of agency – big or small, leisure or corporate,” says Gaudry. “Most of our growth in the past few years has come from purchasing ‘Mom and Pop’ agencies. These one-off agencies vary in size and for the most part are between $1 million and $5 million in sales. But we have purchased the odd agency with sales higher and lower than this.”
One agency owner who sold to Maritime Travel, Isabella Beane in B.C., says the decision to sell was the right one for her. Beane opened Port Moody Travel in 1988 and operated it as an independent agency until July 2015 when she sold the agency to Maritime Travel with the view to retiring. “The Maritime move was a great move for my agency, they promote a strong feeling of family within the organization and provide us with all the tools to work effectively for our clients.”
Selling her agency after so many years was a very emotional experience but the process was seamless and an easy transition, she adds.
Gaudry says he believes “some of the old ‘buying’ agencies have changed the size of the agencies they are willing to buy. Once a company gets purchased by a global company, the size of the agencies they would like to buy does increase dramatically.”
Maritime Travel gets approached by five to 10 agencies per year, he added. The company has made about 50 purchases over the last five to seven years.
Travelweek’s 5-part special series looks at the options available particularly to owners of small to mid-size agencies with annual sales of up to $3 million or so, who may be looking to sell, or downsize their responsibilities, while remaining in the industry. Click here for Part 1.