Montrose’s Andi Mysza on the Acquisition and Future

After 60 years in business, host agency Montrose Travel in December was acquired by Corporate Travel Management (CTM), making CTM one of the 12 largest travel companies in the United States.

The president of MTravel at Montrose Andi Mysza spoke to Travel Market Report about why Montrose decided to sell, how the sale happened, and what the merger means for the travel industry.

TMR: So what’s it like selling your agency?
AM: It’s been an adventure. It’s really exciting – a great move for us and a great move for CTM.

TMR: Why did you decide to sell?
AM: Looking at the long-term direction of Montrose Travel, we had gotten to a point where we had to make some strategic decisions. We have grown to where we are large, but not huge—$300 million a year, so not a mom-and-pop, but also not big enough to have all the buying power and resources we would have liked. We talked about whether we should continue to grow organically, go out and acquire other companies, or be acquired by a larger company. We’ve never had any debt on the balance sheet, though, so it made sense for us to join forces with a larger entity. Our entire staff and customer base will stay with the company and we will get the benefits of the buying power and additional resources of CTM.

TMR: So how did you begin the process of finding a partner?
AM: We weren’t actually looking. We were collaborating with CTM on some projects and over the course of a year one thing led to another and we started thinking about “getting engaged.” The nicest surprise was that the process was pleasurable. We’ve had multiple meetings and many opportunities to sit down for entire days and talk about the strategic direction of the two businesses which was interesting. For me it was a great experience and it didn’t linger on. We made the decision we would be a good fit for each other and moved forward.

TMR: How have things changed so far?
AM: It’s all still very new. CTM has made 12 acquisitions worldwide. We are number six in the United States, and we’ve learned that when CTM acquires an agency, they really value the culture and the people. In our industry, the heart and soul of a company is its people. So with us, they are getting a team with a lot of longevity, and I think there will be some really great career opportunities for our people that we couldn’t offer them before. We have people who’ve been here 15 or 20+ years; one has been here 40 years. We’ve all grown up together. This was not a financial play or a retirement play for us; it was just a question of how we take Montrose to the next level.

TMR: Is his a good time to sell an agency?
AM: If you have something to offer and you are profitable, it’s a good time. From the market standpoint it’s a good time. It certainly made sense for us. Over the years, we have been approached by agencies who would like to sell but whose business was tied to one person, generally the owner. If I own my own agency and I walk away, my customers may just scatter, because they are tied to me personally. So it’s important to evaluate how much of their business is tied to any single person. What happens if they leave, what is the risk? The circumstances of the agency are just as important as the market. Our sales were about $300 million in 2015.

TMR: What’s the biggest advantage for you in this merger?
AM: The biggest thing is that it gives us a global launchpad. From a strategy standpoint, CTM is involved in all the same businesses we are, but weighted differently; they are 80% corporate, so it’s a great foundation for our accounts that have global components and potential new business. We both have group meetings and incentives, so those will overlay and dovetail nicely. We have a formal hosting program and they have independent contractors, so hopefully we will be able to take the hosting program to a new level with them. And another big piece is our loyalty business. Our Loyalty division works with some large financial institutions and that’s a great business to be in. In the travel industry, when the economy goes south as it did in ‘08 and ‘09, people use loyalty points as a currency. So that piece of the business keeps thriving and offers a lot of opportunity. There are a handful of large players and at the end of the day that will be an interesting business for us to grow together. It’s going to allow us to go in new directions and to levels we haven’t been able to reach on our own.

TMR: What does this merger mean for your consortiums?
AM: We’re Ensemble and they’re Virtuoso, so it’s business as usual for now and we’ll evaluate it all as we move along. Both are great organizations.

Pic: Google Earth