|The Leibman Family. Richard (sitting right) emigrated from South Africa to Houston in 1977 and bought Frosch Travel the same year. His son, Bryan, is president & CEO, while daughter Lara is executive vice president.|
Frosch Travel in Houston would make for a tough opponent in the board game Risk. The company knows a thing or two about acquiring assets. It’s not a stretch to say that Frosch has built itself into a travel empire, with revenues today north of $600 million and 30 offices spread across the U.S.—a result of strategic travel agency acquisitions and the proliferation of its independent contractor network.
The agency is a study in family strength, and at the head is Richard Leibman, the 64-year-old company chairman who, for lack of better words, knows how to get things done. Not a day goes by that Leibman isn’t using his web of connections and vast travel knowledge to help out Frosch’s agents or independent contractors. Want your clients to have special recognition at Villa d’Este? Leibman is a close friend of General Manager Danilo Zucchetti. Need an upgrade at The Lanesborough? Richard can easily reach out to Managing Director Geoffrey Gelardi. The same goes for an Abercrombie & Kent excursion or a Seabourn cruise. In fact, in the realm of luxury lifestyle, there are very few places where Leibman doesn’t have insider access.
And that’s part of the effectiveness of Frosch: In a world now driven by technology and online transactions, Leibman is keeping Frosch moving forward and insanely prospering through personal ties, through relationships that go beyond travel and start and end with a handshake and pat on the back. “I can’t book an airline ticket, I have no idea how to use the GDS or do much of anything online,” says Leibman, a native South African who hasn’t lost a trace of his accent even after over 30 years living in the U.S. “I make sure that all the amenities have been provided and that they have been upgraded when available. It’s the same today as it was 30 years ago. Your client is only as good as the last trip he or she has been on.”
We Are Family
Where Frosch is today took a lot of work and vision. It also took a life change. In 1977, Leibman emigrated from South Africa to Houston with his wife and three young kids in tow. Though the dollar-and-a-dream story doesn’t quite fit—it’s close. Leibman’s family had been in the wholesale liquor business back in South Africa for close to 100 years as a longtime distributor for Seagram. However, when the family decided to come to the U.S., the business was sold and the 31-year-old Leibman was left looking for a new career.
Houston, on the surface, may have seemed like an odd choice. “We came over thinking of going to New York, but instead landed in Houston,” Leibman says (he had read about Houston in BusinessWeek, which described it as a “booming city”).
The question was: what now? Leibman had no plans to reconstitute the family business stateside. “Travel was always a hobby I enjoyed,” Leibman says, indicating he always acted as his family’s unofficial travel agent. The travel business, he thought. Why not?
In October of that year, Leibman approached Edna Frosch, whose travel agency had been in business since 1972. At the time the agency employed only four people. Leibman bought the agency, kept the name and moved into Greenway Plaza, a now sprawling office complex on the outskirts of downtown Houston.
Edna Frosch was well-known in the Houston area and had built up a great reputation, particularly with the cruise lines. In order to grow, Leibman decided from the get-go to expand into corporate business. He also established relationships with both the local Jewish and Christian communities (Leibman is an ardent supporter of Israel and has served on the Jewish Federation Board for almost 18 years).
Frosch Travel was humming along through the Nineties—still with one office in Houston. Then things changed. Airlines began cutting commissions, ushering in a new era in travel selling. By this time, Leibman’s children, Bryan, Lara and Neville, were all grown up and had professions of their own. Bryan and Neville both in medicine, Lara law. That was until 1998 when Bryan, the eldest, decided a career in urology was not his true calling. So he did what any son would do; he called his dad.
Bryan joined Frosch that year, and in 2000 Richard installed Bryan as president of the company. “I decided,” Richard says, “that when Bryan came into the business, he was going to be the boss. I gave him the keys to the car.” Smart move. If Frosch were a Range Rover (sturdy, dependable luxury), Bryan turned it into a well-oiled, pistons-pumping Ferrari. “The business model was changing,” Richard says of the time Bryan came aboard. “He understood that right away and better than anyone.”
Frosch’s employees agreed and never displayed any wariness about Bryan, even though he was brand new to travel and to running a business. “Thank God for his vision,” says Rachel Epstein, Frosch’s senior vice president of groups. She is also Frosch’s longest tenured employee besides Richard, having been with the company for 28 years. “Bryan is always ahead of the game, like a great chess player.”
|Richard made the bold move to hand over operating control of Frosch to Bryan in 2000. “He took the business to what it is today,” Richard says of his son.|
At the time Bryan came to Frosch there were 60 employees. Today there are around 950 in offices across the country, including Los Angeles, Chicago, San Francisco and Washington, D.C. A jump in revenue followed suit. What explains the growth? More than anything, Frosch has embraced a strategy of mergers and acquisitions and growing its independent contractor network. “Bryan had the vision to put together different parts of the country and not rely just on Houston,” Richard says. “It’s enabled us to be on the East Coast, West Coast, Midwest. I let him go with that. It was his plan. He didn’t realize what it was going to be, but saw the vision.”
Maybe. Or maybe he knew all along. “A lot was changing when I came on,” Bryan says. “It was looking at the industry as a whole and saying: ‘In order to compete and provide services, we need to grow.’” But acquiring agencies just for the sake of acquisition has never been the thought plan for Frosch. “Our acquisition strategy is nothing more than finding people who share the same values and commitment with their employees and customers as we do ours,” Bryan says.
Frosch’s first acquisition was Travel Associates in Denver. They’ve since acquired so many agencies that keeping track can be difficult. Last July, Frosch made a big stab at the New York market with the acquisition of Linden Travel, whose then-owner Barbara Gallay had known Richard for 24 years. Richard first approached Gallay about a possible sale and the deal was consummated explicitly so Frosch could have a major presence in New York. Gallay remains on board as president of the New York office. “At our staff meetings,” Bryan says, “everyone asks, ‘Which one next?’”
One of the first agencies Frosch acquired was Travel Duet outside Chicago. Owner Janet Hyman said selling was the best decision she ever made. “We were looking for someone who shared our values,” she says. “Our main concern was to maintain our reputation. We had heard horror stories of selling to the wrong person. We talked quite a bit and felt it was a good match. Now, six years later, it was the best thing I ever did.” Hyman says Frosch has provided her needs such as tech support and ease in procuring hotel and air contracts, something “I couldn’t do on my own as a smaller agency,” she says. Name recognition matters. “When my agents book a hotel and say they are with Frosch it opens doors,” she says.
A Winning Approach
At Frosch’s core is the belief that staff should be treated the same as clients. That is to say, pay everyone respect. It’s a teaching adhered to by Richard’s daughter, Lara, who, like Bryan, jettisoned her profession, the legal field, and joined the family business six years ago as executive vice president. (Neville, a practicing anesthesiologist, has yet to be swayed by the lure of travel selling.) Lara attributes her success and the success of Frosch to the lessons taught by her father and mother. “Dad said that it doesn’t matter if it’s the janitor or CEO: treat everyone the same,” she says. “That’s what makes us who we are today and has enabled us to grow.”
Everyone connected to travel suffered in 2009. Frosch wasn’t immune and Richard and Bryan made the tough decision to cut staff salaries, with the stipulation that they’d be reinstated to previous levels a year later. “Everybody understood because everybody believed Richard when he said it was temporary,” says Diana Kearns, who is Frosch’s senior vice president of human resources and has been with the company for 21 years. The balance of salaries has now been restored. “They are true to their word,” Kearns says.
|Diana Kearns, Frosch’s senior vice president of human resources, has been with the company for 21 years.|
Another point of emphasis for Frosch is building up its independent contractor network, which represents the bulk of its staff. The goal is very easy: “Let them do what they do best and give them the technology to support them,” Bryan says. (Frosch has been at the technology forefront with new systems that, for instance, allow for easier lead tracking.)
Berta Aizen, one of Frosch’s independent contractors and based in Dallas, has been with Frosch now for eight years. Her fortunes quickly changed after joining the company. “I was a $2 million producer, with Frosch my revenues have now doubled,” Aizen says. “The reason being that Frosch is so well respected and connected in the industry. A minute after I call someone, doors open up, which opens up doors for my clients.”
Bryan is the operational mastermind behind Frosch’s success, but at the heart of the company is its ability to fashion out-of-this-world travel experiences for an elite clientele. Sure, Las Vegas is a fun time, but Frosch can deliver Sin City in a way most cannot. It was called “Vegas in 24 Hours” explains Richard; a birthday party, where 100 of the birthday boy’s closest friends were flown to Vegas via a 737. There, every couple of hours the scene switched to a new theme. Think lunch in New York (New York-New York Hotel) and dinner in Italy (The Venetian). Then there was the special access. Everybody loves watching the Carnival parade inside the Rio. But how about participating? “They were all in the parade,” says Bryan. There were other exclusive experiences, like backstage contact with illusionist David Copperfield.
Then there are the experiences that sound more harrowing than indulgent. “We had a group from the Young Presidents’ Organization spend time with the Israeli Defense Forces,” Bryan says. It was no picnic, but just the kind of experience and access that 99 percent of the population never gets a crack at. “They spent 44 hours out of 48 not sleeping,” Bryan says. “They learned how to shoot headshots from 200 yards out.” Why? “Because enemies are usually wearing bullet-proof vests,” Bryan says. Sounds more like a fraternity hell week, but not so says Bryan. “The group said it was the most amazing thing they had ever done.”
Experiences like these are usually set up through Frosch’s Private Client Services division headed by Karen Julie in New York. Launched four years ago, for an annual $10,000 fee, clients receive 24/7 white-glove service and access to anything they want—whether it’s impossible-to-get restaurant reservations or tickets to a sold-out show. The list is tireless. “We have the relationships and can make a call anywhere,” Richard says. “Many profess they can do it. But we always come through.”
And that’s Richard; he holds all the cards. “He’s like an encyclopedia,” Lara says. “He’s the one everyone turns to for guidance on planning those extraordinary experiences.” Richard receives daily reports that lay out where Frosch clients are traveling and sees to it that clients receive special recognition. “Nobody goes anywhere or sends clients anywhere without checking in with Richard,” Epstein says.
One of Frosch’s newest clients—or clientele—is the entertainment industry. “We are growing it,” says Lara, particularly now that the agency has visibility in both New York and Los Angeles. It’s a lot of hand-holding, yes, but a windfall. While Frosch is tightlipped on the identity of its entertainment clients, we spied a Def Leppard record framed and displayed prominently in Frosch’s New York office.
No matter how large Frosch gets or how wide a network it composes, there is little doubt that it will remain a close-knit company. This is something ingrained by Richard, Bryan and Lara. Epstein should know, having been with Frosch for such a long period of time. She says luxury travel begins with service and a caring attitude, two traits inherent in Frosch. “When I started we were only one agency,” she says. “No matter how large we get, we all still feel connected, like family.”
|Lara Leibman has a background in law, but, like brother Bryan, joined the family business six years ago. Their other sibling, Neville, has, thus far, stayed in medicine.|