The Travel Business Broker Blog

I hope you all are well. In case you missed it we are sharing with you an article entitled “A Bridge Over Troubled Waters” from the June 29^th edition of Travel Weekly written by an agency owner Charlie Funk, out of Nashville, Tennessee.

Our firm is helping many wise owners of travel agencies all across the country by structuring acquisitions This Relieves the seller of ownership responsibility and frees them to continue in the business while eliminating the stresses of ownership. Right now it is clear that certain suppliers wish to reduce the number of agencies they do business with. Back in the early 90’s, independent office supply companies and pharmacies virtually vanished in a very short time. The owners who sold to competitors early in these two consolidations did very well. Travel agency owners who sell now verses slowly fading away will be happy they shifted the burden of ownership while still being able to do what they love.

ITA has sold 520 travel businesses since our inception in 1991 and not once have we heard from our seller that they regretted their decision to sell. The opposite is true as too many times we hear, “I would of; I should of; I could have sold when I had that offer a few years ago.” The presidents of American and Delta airlines have both publicly stated that they will in the future charge agencies for the right to distribute their product. Cruise lines, hotels and car rental agencies will be considering the same scheme if the airlines can get away with applying more costs to agencies. Unfortunately, our industry of retail travel is set up that certain suppliers are your toughest competitors. Now would be a good time for lots of agency owners to be in serious negotiations about selling in the near term as we watch margin erosion continue.

Time is of the essence, as we are facing an uphill battle that is getting tougher daily. The current economic conditions are forcing agency owners to make critical decisions in the near term. The reality is that many agency owners should be exploring selling their business sooner verses later. My firm is here to help you, your clients and your agents by finding the right, solid match for your agency. We have hundreds of reference letters available for your review. We are also proud members of ASTA and NTA. We look forward to helping you any way necessary.

Please contact us soon!

Bob Sweeney

President ITA

So often in the merger and acquisitions arena we hear from owners when asked if they would consider selling “sell now? I am not ready,” or “I am going to hold out and hope for the best”. I know the positive mentality of the entrepreneurs out there the always conquer never fail we can succeed that has made small business great. I love those people and the energy they carry around with them but, there comes a time when you must play the hand that’s dealt. More often today when I talk to the very people who would say the same things above, are now saying “I should have sold” or “I am ready to get out” not a year down the road. I call it the Yahoo factor.

The yahoo factor. When Microsoft made their final offer for $47.5 billion or $33 dollars a share yahoo played games and refused to sell, as of today there stock price sits at $17.42 a share. Ask any of the still standing board members if they should have sold. That’s what I call the yahoo factor.

Given the climate of today’s market we need to, as business owners, seriously assess the realistic terms of our current and near future. I was told once when it comes to a big business decision think about how it will affect my business 12 weeks 12 months and 12 years from now based on a realistic assessment of my current financial standings. I am not saying that every offer on the table is the wise decision but look at it based on a clear assessment of your current financials. So often we get our hearts tied into the business and we allow the passion and pain to persuade our judgment. When we finally take off the rose colored glasses we are met with a sense doom followed by a time to get off the ride reaction. Unfortunately selling a business is not like selling the house or the car. The strongest thing that you own, your report card so to speak is your financials. Buyers will give you a pass or fail based on those numbers. Pass you make a wise financial transaction that allows you to make more money over the next couple years than if you would have if you continued to own the business. Fail you waited too long and now the business isn’t very interesting to active buyers.

If it’s sunny now but there are storm clouds on the horizon get the umbrella out is what I am saying. Any buyer will look at your financials and projected growth for your company. The buyer will pay based on the risk and the reward of his investment. He has to be able to see both of those for him to justify the acquisition of your travel business.