Since Apple Leisure Group (ALG) and The Mark Travel Group announced a merger earlier this week, a lot of questions remained unanswered, travel agents told Travel Market Report.
“Everyone is saying more info to follow, with anticipated implementation second quarter, which is now. How about some solid info on how this merger will impact us?” said Susan Owens, with 21st Century Ventures in Silver Spring, Maryland.
The news was branded as a merger, forming “an integrated leisure travel and technology solutions company,” though Apple Leisure Group purchased Mark Travel for an undisclosed amount – leaving some agents feeling left in the dark.
Financial firms KKR and KSL Capital acquired Apple Leisure in 2016. “Which entity will dominate? Is KKR/KSL going to be the money/true owners?” asked Suzanna "Sandy" Darley, CIC, of Darley Travel.
The answer can mean a myriad of things for the company. For example, if they are the owner of the new entity, as a publicly traded company, their focus is profits as they answer to their shareholders, Darley points out.
"I am sure agents are curious if Mark Travel will still carry brands like Sandals/Beaches, Hyatt Ziva/Zilara, and Excellence, since those brands pulled their allotments from ALG," said Jennifer Doncsecz, CTIE, president of VIP Vacations, Inc.
Fewer channels, less competitive pricing
The other issue at hand, of course, is that there will be one less channel in the market. Whereas, when there are more booking channels available, they provide more choices and competitive prices for agents.
Agents will lose a channel for price-matching, and commission contracts will need to be renegotiated. Owens also would like to know, “Is there going to be consolidation or do we have to continue using multiple booking engines with different commission structures?”
Darley added, “This opens the door for a 100 percent net pricing environment, thereby making it difficult for the smaller agencies or individual agents to remain profitable.”
On the other hand, “prices become more competitive with OTAs, so there is less of a need to have to price-match. We, then, become more valuable to our customers,” Colleen Gillette, of New Paltz Travel in New Paltz, New York, pointed out.
New travel charter powerhouse
The combined company’s portfolio is immense. Apple Leisure Group controls AMResorts (operating luxury resorts under Zoëtry, Secrets, Breathless, Dreams, Now and Sunscape brands), tour operators Apple Vacations and Travel Impressions, and online travel agency CheapCaribbean.com. Mark Travel is the parent company of vacation brands Funjet Vacations, Southwest Vacations, United Vacations, Blue Sky Tours, My Destination Wellness and Mark International; as well as sister technology company, Trisept Solutions.
“This merger is very strategic and gives ALG command of almost all of the 'charter' markets in the USA to the Caribbean and Mexico," Doncsecz told Travel Market Report, adding the only outlier is Vacation Express, which operates a few Sunwing charters in some markets.
Doncsecz also worries, "that Mark Travel’s preferred partnership with Lomas Travel, their ground DMC in Cancun, which they have loyally used for 30 years, will now be forgotten as ALG’s ownership of AmStar will most likely be prioritized. "
Sandy Anderson, owner of Riverdale Travel, who also has "a great relationship with both Lomas and Amstar," believes there is enough business to support both, and "ALG will see this relationship value in the travel agency community."
What about service issues?
Agents are also concerned about service issues that might arise from the merger.
“I literally spend hours on hold processing simple requests for clients with FunJet (a Mark Travel Brand), and my company is among one of their “top 500 club,” so you would think they would answer quicker. Oftentimes, I have to hang up and call again after one-and-a-half hours [on] hold,” said Paris Brookins, of Posh Getaways by Paris. “That inconvenience has made me choose other vendors (like Travel impressions or Apple Vacations) when booking clients. So, to hear they are merging is concerning.”
While Brookins is remaining hopeful that customer service will improve for agents. “If it doesn’t, it limits my options of who to book with, that can handle complex requests, like people traveling from different airports, quickly. I like to be responsive and provide superior service to my clients, and I don’t want to have to wait hours to get something done for them,” she said.
Anderson believes it will be a positive experience for agents, noting "there are many great systems and processes they both bring to the table. They both have fabulous people working hard for our distribution channel."
Enhanced technology is a positive
With Mark Travel’s strongest asset, Trisept Solutions, agents using one of Apple Leisure Group’s subsidiaries will likely see enhanced technology, which "can truly aid ALG, as technology was never in the forefront or part of their portfolio," Doncsecz said.
Anderson agreed: "I see the ability to have access in one place to a variety of product in real time. Vax is a great booking system. Apple’s booking system has been good, too, combined with the incredible support their team has given us to do custom travel requests. The combination is of great value."
But with “so many unanswered questions at this stage,” Darley will, “hope for the best, but prepare for the worst!”