Hickory Acquires Corp-Net Following Murphy's Exit

<B> Hickory Acquires Corp-Net Following Murphy's Exit</B>

By Sarah Welt

<I>Columbus, Ohio</I> - To keep up in an industry that increasingly requires large volumes and technology budgets, travel agency consortium Corp-Net International has been looking for a buyer--and found one last month in erstwhile competitor Hickory Travel Systems of Saddle Brook, N.J.

Corp-Net has found it difficult to grow in recent years because massive industry consolidation has led to a shrinking pool of players, said chairman Bob Campbell. "So instead of beating our heads against the wall and finding new members, we thought, 'Let's join up with a consortium that's already got the membership and similar interests.' It was a quicker and less painful way to grow our organization."

Hickory president and CEO William Chiles said the merger comes about a month after the departure of Corp-Net president David Murphy, who left for a position outside the industry. "They thought it best to merge with someone like ourselves rather than find a new president and go it alone," he said.

Campbell said Corp-Net and Hickory were well suited in a number of ways, including the fact that both are interested in pursuing bulk buying of travel--a vision Corp-Net had, but was too small to pursue on its own. Corp-Net also was seeking a partner that had its own 24-hour service and hotel program. Corp-Net previously outsourced those services to Thor Inc. and ABC Corporate Services, respectively.

Corp-Net now hopes to negotiate override arrangements with a couple of major hotel chains using Hickory's hotel program, Campbell said. Previously, "all hotel revenue we generated was recognized as coming from ABC," he noted.

The 36 Corp-Net agencies voted unanimously to join Hickory, under an agreement that took effect Oct. 1. Any agency that does not want to switch "will receive its equity value back and can do what it wants to," Campbell said.

In addition to new members, the deal adds about $2 billion in sales and another 400 to 500 locations to Hickory, Chiles said, bringing its membership to more than 190 agencies with 2,100 locations worldwide and $10 billion in air sales.

As part of the deal, Corp-Net has split from its international alliance, ITP Europe. Corp-Net agencies instead will have the option to join First Travel Management International, Hickory's global counterpart, with 176 members, 4,400 locations and $9.8 billion in 1997 air sales (<I>BTN,</I> May 25).

Hickory's largest competitor, Woodside Travel Trust, declined a merger offer from Corp-Net "to maintain the territorial integrity" of its current membership, which overlaps heavily with Corp-Net, said WTT president Ivan Michael Schaeffer. Woodside in 1997 had 131 members in 81 countries, 5,000 locations and an air volume of $19.2 billion.

Two Corp-Net members will serve on Hickory's advisory board in the coming weeks, and no jobs will be lost. The Columbus office will remain open, Campbell said, and existing Corp-Net employees there will become staff members of Hickory.