<B> Amex Buys Morris Travel</B>
By Sarah Welt
<I>New York</I> - In its second acquisition of a super-regional agency in less than a year, American Express will buy the $100 million corporate travel operations of Salt Lake City's Morris Travel in a deal set to close on June 7.
American Express will roll the new business into its American Express One division, set up following its acquisition of Travel One (<I>BTN,</I> Oct. 26, 1998) to provide more individual attention to small and midsize corporate customers.
Morris Travel, meanwhile, will continue in operation as a leisure agency, a market in which it has about $100 million in annual sales.
Morris president and CEO Mark Slack repeated the lament of many agency owners in the current environment when he described his impetus for selling. "This is mostly an airline business, and with the commission caps and the airlines trying to go direct to corporate customers, we didn't feel positioned for that in the future," he said. Slack also acknowledged that Morris didn't "have much clout with the airlines" and was "not well-positioned in the technology arena."
Morris' customers will gain both those things as they move to American Express. Said Diann Donoviel, travel manager for the State of Utah, "Reading the articles in the travel industry, we all knew this was going to happen eventually. I think we are going to see business travel just handled by the huge corporate travel offices." A Morris Travel client for about six years, the state already has transfered its contract unchanged to American Express. Utah will keep its onsite office and the same employees will service the account. While Donoviel could have gone out to bid, "we decided to watch the trend of travel and see if the airlines are going to cut commissions further," she said. "I hate to see the old tradition of travel agencies go away," but the Amex acquisition is "pretty positive for everybody."
Lockheed Martin Idaho Technologies, another Morris Travel customer, is anxious to explore the technology that American Express is offering. "We will have access to a lot of products and services that Morris was not able to provide us just because of the size differences in the companies," said corporate travel services supervisor Dick Schuman.
For American Express, meanwhile, the purchase of the Morris corporate business--where 95 percent of the accounts buy less than $500,000 in air travel a year--"really fits into our strategy of going into business travel for small and midsize companies," said vice president of small business travel Rich Miller. "Morris Travel has a very large presence and good representation in the business travel arena in Nevada, the Northwest and Idaho. We are committed to growing that segment customer base, and that model gives us a great deal more share in those markets.