Irvine-based Sundance Travel International, the third-largest travel agency in Orange County, last month was acquired by Coral Gables, Fla.-based TraveLeaders, one of the nation’s 20 largest travel agencies.
Sundance Travel had gross sales from OC offices of $85 million for the 12 months ended June 30, and was the largest independent agency headquartered here. It was ranked No. 32 among the 100 largest corporate-owned agencies in the U.S. by trade publication Business Travel News last year.
Sundance and TraveLeaders formed a strategic alliance in August in a move that Scott Shadrick, president of Sundance, then said would give the agency a national presence and enable it to take advantage of tour and cruise business that is a specialty of the Florida company. The combined company will have more than $550 million in annual revenue and 650 employees in 50 offices nationwide.
Tom Livermore, chairman and CEO of Sundance, was named executive vice president of operations for TraveLeaders Group; Shadrick was named executive vice president of marketing and business development. Both also were appointed to TraveLeaders’ executive committee.
“(Sundance officials) are now two of five TraveLeaders executives,” said Shadrick in a conference call from Florida. “This move gives us a better chance to compete.”
Shadrick said both he and Livermore, who founded Sundance, will remain in California, though they will travel regularly to company headquarters in Florida. Sundance Travel will take on the TraveLeaders name this week; the Irvine office, which has about 125 employees, will be the Western regional office of TraveLeaders.
“The owners of Sundance won’t disappear,” Shadrick said.
Shadrick said the move was made for several reasons: to enable the company to provide better benefits for employees and remain competitive in the labor market; to use horizontal marketing and the combined purchasing power to the benefit of clients; and because the move allowed Sundance to operate independently but under the TraveLeaders umbrella.
Merger mania was rampant across many industries in the ’90s as companies jockeyed for market share and economies of scale. The travel industry has not been immune to that trend, and Sundance Travel is not the first OC agency to merge with a larger entity.
In 1997, Santa Ana-based Associated Travel,then the county’s second-largest agency,was purchased by Washington, D.C.-based U.S. Office Products, which subsequently spun off its travel operations as Navigant International, based in Englewood, Colo.
Associated took on the Navigant name and became the company’s Southwest Region headquarters last January; it is the county’s largest travel agency with $160 million in gross OC sales for the 12 months ended June 30, 2000. Thom Nulty, former president of Associated Travel, is now president and COO of Navigant in Colorado.
Also in 1998, International Travel Specialists became an independent franchisee of Carlson Wagonlit Travel, which combined two offices in Irvine.
Newport Beach-based Travel Connection grew its business over the past two years through the acquisition of two Tustin agencies. And Adelman Travel Group, Santa Ana, acquired the corporate business division of the former QST Travel in Irvine.
Taking Sundance out of the local equation leaves World Travel Bureau Inc., Santa Ana, and First Class International, Foothill Ranch, as the next-largest independent travel agencies based here.
World Travel ranked No. 9 on the most recent Business Journal list of travel agencies with $35 million in gross sales for the 12 months ended June 30, 2000, while First Class ranked No. 10 with $34 million.
Steve Sedgwick, president of First Class International, which considered an acquisition by a larger entity two years ago, said business has been brisk in 2000.
“We did about $20 million in the last (third) quarter,” he said. That figure includes the acquisition of a $6 million corporate account in Seattle, which Sedgwick said helps give the company a more regional presence.
Given the company’s growth since 1998,it reported a 13% increase between mid-1999 and mid-2000,Sedgwick said he’s glad he called off the company’s acquisition by Minneapolis-based Northwestern Travel Management, a member of the Woodside Travel Trust consortium. Under terms of that agreement, First Class would have become an independent division of Northwestern, with Sedgwick remaining at the helm here.
“Sometimes the best decisions are the ones you don’t make,” he said. n
