Hickory Ownership Changes As It Rebuilds Int'l Network

Saddle Brook, N.J. - Hickory Travel Systems this month launched a new international travel management network, GlobalStar, just as an option to purchase a controlling interest in Hickory Travel Systems holding company HTS Holdings was acquired by New York-based travel club and timeshare holding company American Leisure Holdings.

The deal is expected to close within 90 days, subject to ALH's due diligence.

In a complex chain of events, longtime Hickory leader Bill Chiles on July 11 became chairman and CEO of ALH. One week later, ALH signed an option to purchase HTS Holdings from 60 percent shareholder Chiles for a mixture of ALH's stock and cash. Chiles hopes ALH will become a public company by October.

Chiles, who retained his position as president and CEO of Hickory Travel Systems, said the marriage of his network to ALH was a fiscal imperative of diversification. "In my opinion," he said, "the networks that are not engaging in new, innovative, forward thinking will go out of business."

Although Hickory eliminated 20 percent of its workforce in 2001, Chiles said the company's new ownership gives it the capital it will need to develop new products and services in coming months, including tentative plans for a bulk ticket distribution business.

Meanwhile, the creation of the Hickory-affiliated GlobalStar international agency network boosted Hickory's buying power from $7.9 billion in annual air bookings in 2001 to over $17 billion in total yearly purchasing clout—a move that brings the Hickory network closer to the level of such large networks as American Express Representative Network, Radius and Travelsavers, all of which reported between $17 billion and $18 billion in air sales for 2001.

GlobalStar's new muscle leapfrogged Hickory over Synergi Inc., which reported $10 billion in sales for 2001. Reservation Center CCRA remains the largest network, with a reported $52 billion in reported air sales for 2001. ABC Corporate Services trails in a distant second place, with $25 billion in claimed air sales for that year.

Hickory's launch of GlobalStar replaces the network's global coverage with the First Travel Management network, a venture that broke apart in 2001 when German-owner TUI brought many of First's European member agencies into Brehmen, Germany-based TQ3 Travel Solutions.

GlobalStar is organized into three regions: the Americas, Asia/Pacific and Europe/Middle East/Africa. Each region is supervised and managed by a board of directors representing shareholder agencies based in the respective regions.

The network's U.S. anchor is Waterloo, Iowa-based Short's Travel, which reported just over $100 million in U.S. booked air sales for 2001.

GlobalStar's philosophy includes shareholder agencies in network leadership.

"The structure of GlobalStar is very different from the structure of our competitors," according to president Martin Metzler. "We have a joint management approach. A lot try to copy the megas' model of strong central authority. At GlobalStar, we're more team-oriented."

GlobalStar now is rolling out its GlobalStar Universal Agent Desktop graphical user interface to its member agencies. The proprietary desktop, which reportedly cost Hickory $20 million to develop, has been delivered to 4,000 GlobalStar agents so far. Chiles hopes that 20,000 member agents will be using the desktop by year-end.