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The trek was worth it. Mass, in fact, now claims to hold a unique first-ever in regard to the giant retailer: His franchise travel agency business, Clearwater-based Expedia CruiseShipCenters, is the only full-service travel agency in the country to have an office inside a Wal-Mart. Plus, business there has been so good the past two years that Mass recently opened a second location in The Villages. This one is across the street from a Wal-Mart. “The market in The Villages,” Mass says, “reflects our profile.”
The expansion hasn't only boosted the firm's demographics and geographical coverage. It's also ushered a growth spurt at the company, which has 120 full-time and part-time employees and offices in Clearwater and Port Charlotte, in addition to The Villages. Annual revenues are around $40 million, says Mass, and are up about 30% in 2013. The firm's revenues come strictly from fees cruise lines and other vendors pay.
Growth like that stands out in an industry in decline for nearly a decade mostly due to the rapid rise in online travel bookings. The total number of travel agents nationwide, for example, fell from 111,000 agents in 2006 to 105,910 in 2010, according to the American Society of Travel Agents. The amount of agencies in the U.S. is also down, from 18,500 in 2006 to 14,800 in 2010, the organization reports.
Revenues industry-wide did manage to eke out some growth in recent years, around 2.5% annually, according to a separate report from market research firm IBISWorld. But that's only after a 13% drop in industry revenues in 2009. All told, the U.S. travel industry is a $300 billion market.
That travel agency sector decline forced Mass, a Vietnam War veteran who has been in the industry for 40 years, to aim for a bigger piece of a smaller pie. That requires the Holy Grail of travel industry: repeat clients.
“Our business is all about that customer buying with us again,” says Mass. “We don't want to sell you one vacation. We want to sell you every vacation you take for the rest of your life.”
Mass, 69, does that primarily through what he calls “engagement.” That's where the agency, which operated under the name Anchors Away Cruises and Tours for 15 years, before Mass bought an Expedia CruiseShipCenters franchise in 2010, obtains every would-be customer's travel bucket list. Then the sales staff has something to work off in the competition for repeat business, in trying to help mark those trips off the list. The firm's specialties are cruises, but its agents also have expertise in European and Alaskan vacations.
“We aren't standard travel agents,” Mass says. “We are real vacation planners. We are consultants. We give suggestions and guidance. We don't just give prices.”
Big steps
The niche consultant approach has worked for others in the local travel agency industry, too.
One example is Betty Jenny Armas, who founded Cape Coral-based Galapagos Green Tours early last year. The firm books individuals and group tours on charters to the Galapagos Islands.
And Sarasota-based Admiral Travel International, similar to Mass, has thrived with a focus on creating bucket-list-type experiences for clients. At Admiral Travel, however, the strategy leans exotic, with a specialty in Africa trips. It also leans exclusive, with celebrity-infused itineraries. Guides on previous trips, for instance, include Celia Sandys, Sir Winston Churchill's granddaughter; prominent chef Roy Yamaguchi; and Salvatore Ferragamo, grandson and namesake of the famous Italian shoe designer. “I feel like we have always been able to stay ahead of the trend,” says Malaka Hilton, who co-founded Admiral Travel with her husband, Ryan Hilton, in 1997.
Admiral Travel, through Ryan Hilton, a “virtuoso accredited space agent,” even offers an outer space package. Though this bucket list trip, on the Virgin Galactic Spaceship program run by British entrepreneur Richard Branson, is truly out of this world: It costs $200,000.
Space travel aside, the recession, in general, has made business tougher for Admiral Travel. But Malaka Hilton says an uber-personal approach will always hold value. “We are working harder and longer to sell the same amount,” Hilton says, “but we are always busy. We really don't have an off-season anymore.”
Even Web-based travel agencies need a niche or counterintuitive approach to build long-term success. That's how Tampa-based Webjet, a joint venture partnership with the largest Internet travel site in Australia, grew its market share. Webjet charges consumers a fee, at least $15, for successful airline and hotel searches, with a focus on Americans who travel abroad. Industry leaders such as Expedia, Orbitz and Travelocity often charge less for travel bookings, typically around $5.
“We pride ourselves on service,” CEO Mathias Friess says, “and we believe customers will pay for that.”
Friess, in an interview last summer, projected Webjet would sell $100 million worth of airline tickets and hotel stays in 2012, which would have been up 50% over 2011. He declined to elaborate on Webjet sales or confirm any previous targets in an Aug. 29 interview, but he did say the firm has grown. It now has 25 employees, up from 20 last year and eight when he founded it in 2010.
WebJet also recently landed a top prize, in signing a search partnership with Kayak.com, a leading travel fare site owned by Priceline. “They only work with a limited amount of travel agencies,” Friess says. “That was a big step.”
'Brand awareness'
A big step for Mass came in 2010, when he bought an Expedia CruiseShipCenters franchise. Mass declines to discuss what he paid for the franchise, though an Expedia CruiseShipCenters executive says startup costs for a new franchisee, on average, run between $90,000 and $140,000. That includes a $29,000 franchise fee.
Expedia, the online travel giant, initially invested capital in Vancouver, Canada-based CruiseShipCenters in 2007. The firm bought the travel agency outright last year. “It gave us brand awareness,” Mass says of buying a franchise, “but more importantly it gave us better technology.”
Mass says the Expedia name also gave him the confidence to expand to The Villages, where he's had the most success the past two years. That's gone so well he's now considering other expansion locations in Florida.
A Michigan native, Mass has been in the travel business since he returned home in 1971 from a tour of duty in Vietnam. He served in the U.S. Navy on the USS James E. Kyes, a destroyer. He first worked in executive sales roles at cruise lines and with Northwest Airlines. In 1995 he bought Anchors Away Cruises and Tours from a friend in the industry.
Then based in Dunedin, with five employees and annual sales of $300,000, Anchors Away struggled for a few years to adapt to a changing marketplace. One key move Mass made early on was to shift from daily newspaper advertising to direct mail and the Internet for sales leads. Mass also grew the firm's payroll, a process that included going “through many people.”
Finding and maintaining a talented sales force remains Mass' No. 1 challenge and priority. “This is a people business,” says Mass, “and unless you have well trained, motivated, knowledgeable people who really care that their customers have the most enjoyable vacation possible, you will fail in this business.”
Big Plans
The Expedia brand name is all about fast Internet travel searches.
But Ed Mass is part of a small contingent of Florida travel industry entrepreneurs who would like to see the Expedia name get recognition for cruise and other travel planning services.
Mass runs four travel agency offices under the Expedia CruiseShipCenters franchise banner, including locations in Clearwater and Port Charlotte. Vancouver, Canada-based Expedia CruiseShipCenters has 185 offices in North America, with 45 in the U.S. Mass bought his franchise in 2010, one of five in Florida, and the only on the Gulf Coast. “We continue to grow our number of locations,” John Felice, Expedia CruiseShipCenters vice president of franchise operations, says, “while (competitors) continue to shut down.”
Founded in 1987, Expedia CruiseShipCenters offers travel and vacation consulting, with a focus on cruises. The company, says Felice, has at least a 20% share of the Canadian cruise market. But the market share in the U.S. is less than 1%, which is why the country is a growth target. “We want to be the best cruise specialist in the world,” Felice says. “That's been our goal from day one.”
The company took a big leap in that direction in 2007, when Bellevue, Wash.-based Expedia, a $4 billion publicly traded firm, bought a small interest in it. Expedia bought the firm outright last year.
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