Travel Leaders invests in cruise-sales power with CruCon deal

Travel Leaders Group (No. 9 on Travel Weekly’s 2016 Power
List) will make an investment in New Hampshire-based CruCon Cruise Outlet (No.
56), already one of the largest agencies in the Travel Leaders Network.

CruCon’s annual cruise sales in 2015 totaled more than $125
million, which will enable what Travel Leaders Group (TLG)described as “exponential
growth” in its cruise sales volume as a result of the investment.

“This will significantly increase our sphere of
influence with our supplier partners and allow us to capture additional
economies of scale,” said John Lovell, president of Travel Leaders Network
and Leisure Group.

TLG declined to say how much it plans to invest in CruCon,
but said it expects the deal to close in early 2017 and that CruCon’s founder
and CEO, Sandra Cleary, would continue to lead the company.

Cleary will also be charged with heading TLG’s effort to
invest in more cruise-selling agencies. Its current wholly owned, cruise-focused
businesses are All Aboard Travel, CruiseDeals.com, Cruise Specialists and
SinglesCruise.com. By way of CruCon, TLG said it “will seek to consolidate
up to $1 billion in annual cruise sales volume over the next several years.”

On that front, Cleary said that CruCon is “in early
discussions with several agencies currently.”

CruCon has thrived as a cruise-focused agency, although it
expanded into land tours in 2015. But Cleary said TLG “has resources that
will allow us to grow enormously, along with the potential to add their
industry-leading air, hotel and land products to our portfolio. … We are
currently over 90% cruise, so this opens the world up to us in terms of
potential offerings.”

Jack Mannix, founder of travel industry consultancy Jack E.
Mannix Associates and the former president of Ensemble, speculated that
TLG might be looking to consolidate its selling power in an industry where
three major cruise companies control 90% of the product, and where it’s
difficult for any travel retailer, even very large ones, to really have
negotiating strength.

“This is particularly true when your volume is spread
over hundreds or even thousands of independently owned locations; in that case,
you really cannot dictate what they sell or truly control what they sell,”
he said. “With ownership or partial ownership in some of its largest
member agencies, TLG now has the ability to truly control what the organization
sells. And if that’s the strategy, that could be a game changer in its
competitive set. … I’m sure that the cruise lines don’t want to see any one
retail arm gain too much strength.”

Mannix said that if TLG were very successful in doing this,
other travel retailers might take note.

“I’m just not sure how many in the industry have the
same financial horsepower as TLG,” he said.

Marc Mancini, president of Marc Mancini Seminars and Consulting, said
that while the “obvious outcome” will be that both companies have
greater leverage with their suppliers, there may also be “hidden
benefit” in the service area.

“CruCon will most likely be able
to tap into Travel Leader’s training programs to enhance the skills of
their sales and service team, to extend its service hours and to
strengthen its follow up protocols,” he said.

TLG last summer said it would consolidate three of its
brands into a single entity in an attempt to eliminate intracompany competition
and external brand confusion.

Travel Leaders Associates, Results Travel and Vacation.com
will be known as Travel Leaders Network, offering both consortium and franchise
solutions to agencies.

Asked whether she thought TLG would consolidate its other
cruise-focused brands with CruCon, Cleary said, “That would totally be a
decision at the executive-management level of TLG.”
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Jamie Biesiada contributed to this report.