Great Southern Travel adds two local agencies

by Paul Schreiber

SBJ Reporter

pschreiber@sbj.net

Carlson Wagonlit/McDaniel Travel agency became Great Southern Travel at the Galleria Jan. 5, said Kris Conley, executive vice president and general manager for Great Southern. Conley did not disclose what Great Southern paid for the agency, which employed 14 at 1550 E. Battlefield Road.

The merger, Great Southern's second agency buyout in less than six months, gives it 115 employees making it far and away the largest travel agency in Springfield. In August it bought 35-year-old House of Travel in the Brentwood Center, a seven-person agency devoted to leisure travel customers. On Jan. 1 it became Great Southern's House of Travel.

Including McDaniel Travel's revenues, total retail sales for the entire travel subsidiary of Great Southern bank should be about $60 million in 2004, said Conley, adding that Great Southern's totals split about equally between corporate and leisure sales.

McDaniel Travel operated out of about 5,000 square feet in the Galleria, which it leased for about $5,000 per month, said Marvin McDaniel, who owned the agency with his wife, Donna. Sales were typically 60 percent corporate and 40 percent leisure travel, he added. He opened the agency in the Brentwood Center in 1981 and moved to the Galleria in 1983.

McDaniel's son, Brian, previously managed about $6 million in corporate sales with McDaniel Travel. He is now corporate sales manager overseeing about $30 million in corporate sales from Great Southern's 7,500 square-foot offices at 3242 S. National Ave.

Behind the deal

Conley said McDaniel initiated the contact.

Marvin contacted Conley and wanted to talk. "Great Southern has really been in an acquisition mode now ever since 9-11," he added, noting a vast potential for growth in the travel market. "The bigger you are the more clout you carry in the industry, the better deals you can get for your customers.

"After 9-11, rather than circle the wagons and downsize, we were going to try to increase size and become a really big player in this industry," Conley added.

While Great Southern Travel laid off 11 employees after 9-11, by the end of 2003 its employee numbers reflected a full recovery to pre-9-11 staffing, he added.

"I wanted at some point in time to get out from underneath the financial risk of the industry," said Marvin McDaniel, adding that a merger with Great Southern allows him to reduce expenses while adding benefits not available to a small business.

House of Travel

In August, Great Southern bought House of Travel from Linda Strait, who had owned the business since 1985 with Andrea Mitchell, Strait said. The agency employed seven in-house. She would not disclose the price Great Southern paid for the business.

Maintaining a competitive edge was the rationale behind the sale, Strait said. Going with Great Southern gives House of Travel more depth in terms of trained personnel and frees Strait from accounting and human resource tasks, she added.

Strait and McDaniel will continue management of their respective locations.

Great Southern dimensions

Overall, Great Southern has 14 offices, including an airport location that does "just over $10 million a year" in corporate sales, Conley said.

Great Southern has had its airport location for more than 20 years, said Sherry Wallace, marketing director for the Springfield-Branson Regional Airport. For $860 a month, the agency gets almost 400 square feet; its lease runs until May 2005, she added.

The second-largest Springfield agency, according to SBJ's 2003 Book of Lists, is Springfield Travel Service with 12 employees.

Conley said there are essentially six areas of revenue generation at Great Southern Travel: corporate sales, leisure sales, airline reservations, group travel arrangements under Great Group Getaways, luggage sales through its Excess Baggage divisions at its Springfield and Joplin stores, and show tickets and hotel accommodations available through Branson Box Office.

"Our agents specialize in certain areas and they don't cross sell," Conley said.

Corporate accounts typically spend a minimum of $50,000 with Great Southern in travel expenses annually, Conley said. In return they get their trips and expenses tracked and reported back to them in the form of monthly reports.

What's really important to business travelers is that they get their frequent flyer credits and that the travel agent takes "advantage of corporate negotiated discounts, booking the right car rentals, negotiating hotel rates at hotels that they frequently use," said Marvin McDaniel.

Franchise release

Great Southern opted out of retaining the acquired agency's franchise with Carlson Wagonlit, which has 4,000 franchise locations nationwide. Great Southern wanted to strengthen its own name recognition in the market and didn't want the expenses, Conley said, adding annual franchise fees for McDaniel ran about $15,000 a year.

"Great Southern's volume is such to where we get these deals on our own without having to go with a national franchise of some sort," Conley said. Due to Great Southern's increased size, commission levels and travel discounts almost mirror what an organization like Carlson Wagonlit can offer, he added.

Employee numbers

Staff numbers are sufficient heading into 2004, said Conley, who didn't anticipate any new hires but added that if agents with experience contacted Great Southern "we'd probably hire them whether we needed them or not, because good, solid agents are so hard to come by."

While compensation for successful agents varies by region, Conley said, an experienced local agent who is not in management would probably make about $30,000 annually. Rates of commission typically range between 10 percent and 15 percent, with 15 percent the ceiling.

Conley joined Great Southern Travel about six years ago when it bought out his 18-year-old travel agency, International Tours of Monett. At the time he sold the agency it employed four and produced about $5 million in annual sales.