WTP Merges With BTI Team

<B> WTP Merges With BTI Team</B>

By Sarah Welt

<I>Atlanta</I> - The complementary fit of the BTI Americas management team and geographic presence combined with the long-term vision and private assets of WorldTravel Partners' principal owner this month in a merger deal that created the third largest travel agency in the United States.

The two companies began working together last June when WTP supported the management buyout of BTI Americas from Electronic Data Systems of Plano, Texas (<I>BTN,</I> July 20).

In an exclusive interview with John A. Fentener van Vlissingen, chairman of the combined organization and his WorldTravel partner, CEO Jack Alexander, van Vlissingen told Business Travel News that the deal to create the $3.3 billion company never would have been struck had WTP been publicly held.

"We had to move very fast to be able to do this transaction. If I had been the CEO of a quoted company on the stock exchange this deal would not have been done," van Vlissingen said. Other companies would have "had to look at quarterly earnings and I didn't have to. I am in it for the long term. With two companies of this size coming together, there are natural synergies and we need to make changes, but we can do that without a quarterly earnings statement to get nervous about."

In approaching the bargaining table, WTP was heartened by BTI's track record for client retention, especially in light of the fact that its ownership had been in question for more than a year. WTP found in BTI Americas a strong geographic presence in the North, which fit well with WTP's Sunbelt profile.

Van Vlissingen, whose vision is to build a travel services company for the next generation of his Dutch industrialist family, also embraced the deal because he and Alexander had recognized the importance of increasing WTP's size in order to be a competitive long-term player.

"Being a super regional was not going to be enough going forward, not that being the third largest agency was a priority, either," he said. "Numbers are not important. What is more important is what clients want from you, and clients more and more want you to handle their total business in the United States. Some of them say we have to handle their account globally and we must be able to do that." He noted that having one global brand and staying on top of technology, particularly the Internet, is vital going forward.

The trend toward competitiveness through consolidation was further fueled this month by the announcement of the acquisition of Travel One by American Express (see story, page 5). "Personally, I think there will really only be a handful of companies with brands to service the large market," Alexander said. "It is important to us to be one of those brands."

Alexander indicated that the agency has targeted other areas of the country that would be appropriate for acquisitions in the not-so-distant future, including Houston and other western markets. Van Vlissingen said, however, that with a major integration task ahead in America, when it comes to acquisitions "next year we will see more in Europe."

WTP's holdings in Europe currently include travel agencies in The Netherlands, Belgium and Portugal, but van Vlissingen is particularly excited about the new relationship yet to be formalized with Business Travel International, which will offer a network that is "virtually in every country in Europe." While he does not foresee a need to establish an equity relationship with the consortium in the near term, with U.K.-based Hogg-Robinson plc, WTP/BTI and the Scandinavian Quoni, "we now have three pretty powerful groups together. We should be willing to change our vision if it doesn't work but for the next three to five years, we have a very strong combination."

While the combined entity is committed to being the U.S. managing partner of the London-based Business Travel International, for the time being WTP is still part of GTM Travel Management, the London-based international network.

GTM, for its part, has wasted no time in coming up with an alternate affiliation, announcing this month that it has signed a letter of agreement to merge with Internet Inc., an international agency network affiliated with Maritz Travel Co. of St. Louis. The combined entity plans to have its branding structure defined by year-end.

"This is a chance to add strength to some countries we didn't have coverage in," said Maritz president and CEO Michael Boland. "It is just like any other business--we are always trying to upgrade our organization. We've been very successful, but opportunities like this don't come along every day."

Meanwhile WorldTravel Partners is working to bring BTI Americas' franchise business--which accounts for about 53 agencies and $600 million in ARC volume--into its fold. Alexander said franchisees will gain access to new technology and obtain better buying and negotiating leverage from the deal.

Under the new management structure, virtually all senior executives from both organizations will have a continuing role, and BTI Americas management owners now own a minority stake in the combined organization. Alexander, WTP's co-founder and chief executive officer also is CEO of the new company, and BTI Americas president Ralph Manaker, with WTP's president of corporate travel and technology Danny Hood, are co-presidents of the new organization. Hood will be responsible for the field organization and sales, while Manaker heads up the integration effort. Headquarters will be in Atlanta, Ga., but division headquarters will remain in Northbrook, Ill.

While EDS no longer has a financial stake in BTI Americas, the two organizations are still working together. WTP's technology subsidiary, Travel Technologies Group, eventually will serve as the technology arm of the entire enterprise, but for now Manaker said the BTI end of the entity has a transition agreement that will continue for the next couple of years. During that time we will make a decision to continue using them for some development on a long-term basis or completely transition out EDS's involvement, though it is our intent that TTG will ultimately be our technology supplier," he said.

BTI Americas, meanwhile, already has begun to "answer the phone as BTI/WorldTravel Partners," Manaker said, and "will eventually migrate to WorldTravel Partners in the United States and internationally."

The new company also is looking at synergies on the vendor side. "We're evaluating options with payment vehicles," said Alexander. "But we've seen some companies change banks and card programs and our philosophy is to study something until it is well thought out."

On the airline side, van Vlissingen said WTP has good relationships with American, Continental, Delta and United. Alexander said the merger has reinforced its airline relationships, where "there were more similarities than differences, and our sheer size as a combined company places us in a good position."

The combined organization also is planning to merge hotel programs, and BTI's head of industry relations is moving to Atlanta to help WTP's hotel director run the integration. The company plans to have a combined hotel directory available next year.

Meetings, an area in which both entities had considerable strength, will be managed by Rigsby Barnes, general manager of the meetings and incentives division. It is being set up as a separate unit from corporate travel. Onsites and reservation centers will be equipped with basic meetings services but more complex business will be handled by the separate division. Additionally, the combined entity will use its Web-based corporate meetings booking tool. Code named Project Zorro, the product lets users register for a meeting and book housing, air and ground transportation. The tool is a rewrite of its current meetings product and is scheduled for general release in 1999.