After Two Failed Acquisitions, InteleTravel Still Wants to Buy a Cruise Line

Despite some failed acquisitions, InteleTravel is still zeroed in on expanding its business to include a cruise line.

In an exclusive interview with TMR on Wednesday, InteleTravel founder James Ferrara revealed the company is actively looking for a cruise company to purchase—one of several areas that InteleTravel wants to get into.

The strategy is nothing new for InteleTravel, which has been pursuing a level of vertical integration for years. Recently, it purchased Major Travel, a U.K.-based tour operator, and acquired Tickitto, another U.K.-based company that provides access to live event tickets. But it has yet to add a cruise company, which is now the next big focus for the team.

“We’re such a powerful cruise seller that I would like us to have a stake in the product,” he said, adding, “Any cruise line that we do business with winds up growing because of us.”

Ferrara confirmed to TMR that the company did try to buy six American Queen Voyages river ships after the Hornblower Group put them up for sale last year. American Cruise Lines ultimately outbid InteleTravel for the ships, which were then recycled. That was one of two failed cruise acquisitions that InteleTravel worked through over the last couple of years.

“The conditions weren’t exactly right for either deal,” he told TMR. “But this is something we actively want to pursue—there are conversations going on, I just haven’t found exactly the right deal.”

As to where exactly that interest lies, Ferrara mentions river cruise as “a very interesting area” for the host agency, pointing to the opportunities in domestic travel.

“River cruise has seen amazing growth and there isn’t much domestic cruise product,” he told TMR. “I believe we saw something very clearly during the pandemic that people do not stop traveling when these things happen… but they change their travel behavior. Many people turned toward domestic travel during that period and I believe that is going to continue happening. This isn’t our last pandemic or our last period of uncertainty. Domestic travel will continue to win during those periods, and I would love to have a foothold in that marketplace.”

Thought Behind Vertical Integration

There’s a level of simply expanding InteleTravel’s business with a cruise line acquisition, including diversifying as a travel company. “From a diversification point of view for our enterprise, we are able to profit as both the distributor and manufacturer,” he said. But there’s also a clear thought from Ferrara about giving its advisors a stake in a business it helps grow.

“When we invest in a product company, we bring not just cash, but we bring distribution and competencies in marketing, managing, and technology… We are growing these companies that we invest in. Every product we touch, we enrich, so why shouldn’t we have a stake in it?”

Ferrara made it clear that he doesn’t see a move like this as a replacement for suppliers—40% of InteleTravel’s U.S. business is cruises, amounting to $400 or $500 million in annual revenue, he said, a number that would be impossible to meet without a depth of cruise line supplier partners.

“I am not seeking to replace our suppliers, but I am adding to the mix product that we have an even greater degree of influence over.” He notes that the strategy is working, pointing out that InteleTravel’s distribution helps drive sales, saying, “Celebrity Cruises listens when we have something to say about their product.”

He also doesn’t see a conflict operating a supplier and a host agency under the same banner.

“That’s the world we live in: the world is getting smaller, and the enterprises, in order to compete, have to get bigger. You either have to get bigger or you have to get really niche-focused,” he said.

Growth is Changing, Tech is Key

The M&A strategy for InteleTravel is very much alive outside of a cruise company purchase, too. Ferrara confirmed that InteleTravel has several acquisitions underway, including a deal set to “double” the size of its meetings and events company, MGME, and a new technology program that will allow advisors to book groups into hotels, meeting venues, and restaurants, with that deal expected to close by the end of the year.

The company is also adjusting its expectations. InteleTravel saw 50% to 70% year-over-year growth coming out of the pandemic; now, Ferrara told TMR the company has to be more conservative. He had an initial projection of about 30% growth for this year, which the company is now expected to surpass, but he says they’ll stay conservative on growth forecasts going forward.

A big part of that path involves technology. InteleTravel has its own AI shop with 35 developers and is focused on creating a “super advisor assistant.” The platform will use all of InteleTravel’s data to offer personalized advice, such as recommending the best product and time for an advisor to contact clients.

Ferrara’s takeaway for advisors on AI: “The technology can give you price but not advice, so I reassure our advisors all the time that AI will not replace you—another travel advisor using AI might replace you.”