|LEISURE EXPERTS: Cynthia Riggins, director of vacations, Kansas City; Gary Davis, president, Acendas and Ellie Noyes, director of vacations, Minneapolis.|
The vacation division at Acendas is enjoying a robust surge in business as a rising economy increases demand and the inner workings of the Kansas City-based company significantly fuel its growth. With an overall revenue of $185 million, Acendas operates three divisions — leisure, corporate, and meetings and incentives. Those healthy earnings, expected to hit $200 million in 2015, give all of its sectors significant buying power, which Acendas can pass along to its vacation clients. Other factors, such as membership in the large travel network, Vacation.com, further drive business, as does a new technology platform that generates leads from consumers browsing the Acendas website and its social networking sites.
Gary Davis, co-president of Acendas, oversees the vacation segment, as well as technology initiatives and accounting.
“I work on the fun side,” says Davis. His background includes software technology and he retains a keen interest in new innovations that will drive the business forward. Case in point: Earlier this year, Acendas revamped its websites and social networking pages at a significant cost so it could track how customers were navigating its pages. Using Salesforce and Act-On, a marketing automation software platform, consumers are scored by their behavior. For example, if someone clicks on offers on the Acendas Facebook page, travels to the Acendas vacation website and downloads a white paper on vacation travel and their Act-On score hits 20, they’re deemed to be a serious customer. As a result, they’re turned into a sales lead and a travel advisor contacts them.
“With social media, you often don’t know who it is that’s touching you,” says Davis. “You might get an e-mail address if you’re lucky. Our goal is to keep putting things out there on Pinterest and Facebook and LinkedIn and Twitter. But we need tools to measure the people that are touching us, to see if they opened our e-mail, looked at our pin, or went to our website.”
Although such leads are generated in a new, unique way, Davis says once they’re in the travel advisor’s hands, it’s all about creating that traditional human relationship with the customer.
The Acendas vacation division is a well-oiled machine. Leisure specialists go on calls with the corporate sales team to let clients know that they have access to a VIP vacation planning service. The Acendas meetings and incentive director provides those same specialists with leads from her contacts. It works in reverse as well, with the vacation team on the look out for leads it can provide to its counterparts. The diverse business model sustains the company through economic shifts. “For example, meetings and incentives was our most profitable division until 9/11,” says Davis. “Corporate travel carried us through that era until 2008 when the recession reduced corporate travel budgets. Although we didn’t see growth from our vacation division during this period, it also did not decline, and it carried the weight of the other divisions.”
All told, the Acendas vacation division has an annual revenue of $25 million a year and is expected to grow to $27 million in 2015. Fifteen specialists cover just about every destination, and each must be certified by a third party on their specialty, whether through a supplier, a tourist board or other professional entity.
Acendas also subsidizes an annual visit to the destination each year, as long as it’s to a different place each time. “If you’re a Mexico specialist, you have to go to different resorts; if you’re a cruise expert, you need to get on a different cruise line in a different type of cabin. [Our specialists] need to be able to really tell the story,” says Davis. Advisors are trained every other month at the agency’s headquarters in a full day of seminars and product updates provided by invited suppliers.
Acendas also has about 35 independent contractors and helps them to grow their business as well by setting them up with Vacation.com’s Engagement marketing program, which sends direct mail to their clients on their behalf.
“We use positive reinforcement to encourage our specialists to use our preferred suppliers,” says Davis. “Each time a booking is made with a preferred [supplier], the specialist’s name is put in the hat. At the end of the year we draw names from each of our suppliers’ hats and that specialist wins cash or a trip.”
There are three requirements to become a preferred supplier with Acendas. One, the mega-agency must have a direct contact with the decision maker at the supplier’s company.
“We will filter out smaller issues, but when we call, it’s something that needs to be resolved and quickly,” says Davis. “We have a single point of contact at our company that filters through the issues and makes the decision on when to call the supplier, which keeps the supplier from getting many calls from many agents.”
The level of support the supplier can provide to Acendas specialists is also considered, including attendance at the bi-monthly learning sessions.
Lastly, preferred suppliers must provide marketing support for Acendas and Vacation.com.
“We also prefer to work with suppliers that have a 24/7 toll-free number for our clients to call if something needs attention,” says Davis, who cites Classic Vacations as a company that has this service; it also has a local representative available most of the time. “They also offer higher end rooming options including suites and villas, and most important, a no-walk guarantee,” he adds.
The Acendas headquarters in the Kansas City metro area is well poised to welcome visitors, whether they’re suppliers or clients. It’s a 12,000-square-foot venue in a strip mall that once served as a JCPenney. Davis enjoys the surprise factor such a humble exterior provides. He imagines most guests walk in anticipating a tiny staff with brochures all over the place. The reality is 12,000 square feet of space with soaring ceilings and a sophisticated work environment.
“We’re a wolf in sheep’s clothing. This is not your grandparents’ travel agency,” says Davis. The investment in the office was worth it; when a client visits, whether they’re corporate, meetings and incentive or leisure, it’s a 95 percent sure thing Acendas is going to seal the deal, he adds.
The company upgraded its office space after the airlines cut their travel agent commissions in the late ’90s. Davis and his team closed down the seven satellite offices in Kansas City and consolidated them into the larger space.
It adopted a similar strategy with the Vantage Travel in Minneapolis, which it purchased in 2010. Last June, Acendas moved those offices out to Eden Prairie, installed the company name on the building and took over three quarters of the second floor. A heavy refurbishment created space that draws a “wow” reaction, says Davis, one that looks truly professional.
“It’s the same as when you walk into an attorney’s office or a financial firm, the first impression is that these guys really know what they’re doing,” says Davis. If done the wrong way, office space can tell clients they’re in the wrong place and need to conduct their business elsewhere. On the other hand, a classy environment lets clients know that the agency is here to stay.
What do luxury clients want?
The Acendas luxury leisure client typically hails from the upper ranks of its corporate accounts. This well-traveled group wants to truly experience a destination rather than sit on a beach for a week, says Davis. “They want very in-depth, planned experiences. It’s not, ‘Let’s just book the Dorado Beach, Ritz-Carlton Reserve for a week and see you later.’ It’s, ‘Okay, we’re going to book it and we’re going to do a private tour.’”
Another trend? More mature executives are traveling with grown children who have also “been there and done that.” They’re seeking more sophisticated family vacations, say, to a vineyard in France, or to take a train excursion on the Orient-Express.
Acendas recently crafted a luxury trip around a Silversea Mediterranean cruise for a family that was gathering to honor their late mother. The trip included a three-day pre-cruise stay at the Hotel Arts Barcelona with a private, no-waiting tour of the Sagrada Familia cathedral, the Museu Picasso and a tapas tour through the city. During the cruise, they kayaked in Marseilles, hiked in Sicily, and attended the Grand Prix in Monaco. Post cruise, the family stayed at the five-star Hotel Eden in Rome, enjoyed a private, after-hours tour of the Vatican and a night-time visit to the Coliseum.
At Acendas, most client business is conducted over the phone or in person. The company will not work with a new client via e-mail, says Davis. “We are not a library. We do not get subsidies from any government. We have worked hard to get the knowledge that we have and we are not giving it away.”
The company credo is that it’s all right to say “no” to simple transactions to which an Acendas advisor brings absolutely no value, and it doesn’t hesitate to send potential customers to an online agency if all they are booking is domestic airline tickets. “But we are sure to let them know that when they are ready for that trip to Europe, a cruise or beach vacation, we are here to help plan the experience they deserve,” Davis says.
Davis’ accounting expertise comes into play when determining whether certain transactions are actually worth the time.
“A good measurement of how you are doing is to take the total number of invoices you have issued during a period, along with the total revenue generated [revenue is commissions and fees; not total sales]. Divide the total revenue by the total number of invoices to get your Revenue Per Invoice [RPI],” says Davis. “What I like about this formula is that volume will not help you increase your RPI, but focusing on sales that you truly bring value to will,” he says.
As an example, he cites one company associate who generates $100,000 per year in commissions and fees, and 400 invoices. Another generates the same revenue but with only 100 invoices per year. “Which one do you think works 80-hour weeks?” he says.
Acendas is very database marketing intensive; its files contain data on customers who have traveled with them over the past 32 years. As a result, clients are marketed to in a most exacting manner.
“We really focus on keeping our name in front of those clients and we do a good job of doing that with our own e-mail marketing program,” says Davis, who then counts on Vacation.com to take care of direct mail efforts. “We know about three months in advance from Vacation.com which direct-mail pieces are going to be received at home by a client. We’ll back that up with an e-mail marketing program, and we’ll make sure that those same offers are on our website.”
An aggressive social networking effort ensues. “We pin them, we tweet them, and we put them on our Web page,” says Davis. “We make sure it all matches up, because I know I’ve been frustrated when I get an e-mail from someone wanting to sell me something, like a golf club that I really want, but when I click on the link and it takes me to generic website where I have to dig to find the offer they e-mailed me about.”
The Act-On strategy, which tracks user behavior throughout all of Acendas’ sites, is already reaping rewards on the corporate side and Davis is certain the vacation segment will soon benefit as well. This new strategy follows another significant strategy shift for the company, which was to change its name to Acendas in 2011. Until then, it was operating under 12 monikers, including All About Travel, Heritage Travel, Vanguard Travel and Platinum Vacations. The worst part? The company didn’t own the URLs for any of them. The challenge was to come up with a new name that would speak to all of its business units and had a dot-com address that was available. Acendas is drawn from bits of Latin and means loosely, “to help move up.”
“Now everybody has the same business card and letterhead,” says Davis. “It eliminated a lot of pain for us and everyone feels as if they’re part of one family.”
While this was a significant cosmetic change, Davis says the soul of the company is its people and that Acendas has the best in the business. That keeps him smiling.
“Our leadership team, made up of the managers or directors of each division or department, runs the business on a day-to-day basis, allowing Brent [Blake, co-president] and me to be visionaries,” says Davis. “As our industry changes at the speed of light, it’s important to keep re-inventing yourself to keep up, especially with the large number of Baby Boomers reaching retirement age and the emerging Millennial market, which loves to travel. What a great industry this is to be in. The future for Acendas and the travel industry is better than ever.”
Co-Owners and Presidents: Gary Davis and Brent Blake
Headquarters: Mission, KS (Kansas City)
Personnel: 56 associates, 35 independent contractors
Annual Acendas Revenue: $185 million
Annual Vacation Division Revenue: $25 million
Affiliations: Vacation.com, BCD Travel Affiliates
|Top Trio: Cynthia Riggins, Ellie Noyes and Gary Davis of Acendas keep the $25 million vacation business growing.|
How Acendas Came to Be
The nucleus of what would become the $185 million Acendas enterprise was founded in 1993 by Gary Davis and his wife, Jackie, who had been his travel agent when he worked for his father in the oil field service business. “She sent me to many wonderful places in the world during that period of our lives — India, China, Russia, Europe, South and Central America — anywhere there was oil,” says Davis.
After his father passed away, Gary and family moved to the Kansas City area, seeking to start or buy a new business. A broker proposed several options, including purchasing a small travel agency in a strip mall. Gary wasn’t interested, but Jackie jumped on the opportunity and the two found themselves running a $900,000 agency called Travel Shop. “It was a very fortunate move, as over the next seven years we acquired six more agencies, mostly due to the commission caps put in place by the airlines,” says Davis, noting that one of those agencies was a $5 million company. “Most agency owners thought the caps were the beginning of the end, but we embraced it as an opportunity to grow our client base at a discounted price.”
In 1997, it was all moved under the umbrella to one location, under the name of TravelQuest. In 2000, TravelQuest, which was a $15 million business, was merged into All About Travel, a $30 million company, forming a $45 million powerhouse. The deal came together easily, going down something like this when Gary and Jackie in November 1999 sailed on the inaugural of Royal Caribbean’s Voyager of the Seas.
“After arriving, we spent the afternoon looking the ship over and ended up running into Coby Gaulien, the owner of All About Travel, and his wife, Barb, about four times,” recalls Davis. “Then at dinner, we were seated at a table with Coby and Barb, totally by coincidence. We knew this was some kind of message,” he says. “Two months later, we merged our companies; TravelQuest was about 75 percent vacation travel and All About Travel was 95 percent corporate, so it was a perfect marriage that formed the three legs of our stool.” In 1997, Brent Blake had merged his Cypress Meetings and Incentives into All About Travel; he remains at Acendas today as a co-owner and co-president, running the meetings and incentives and corporate segments of the business.
Following the 2000 merger, All About Travel acquired some sizable entities such as Vanguard Travel in Minneapolis, Total Travel in Chicago and Heritage Travel in Dayton, OH. In 2011, all were moved under the Acendas umbrella.
Today, Gary and Jackie, who remains a shareholder in the company and represents Acendas at charitable and social events, prefer to travel to destinations they’ve not been to before. They recently ventured to Istanbul to check out The Ritz-Carlton, Shangri-La Bosphorous, Four Seasons Sultanahmet and the Ciragan Palace Kempinski.
“Clients and friends are always asking what our favorite destination or resorts are. Being that we rarely stay in the same place more than once, that’s a tough question. We love them all,” says Davis.
Top Trio: Cynthia Riggins, Ellie Noyes and Gary Davis of Acendas keep the $25 million vacation business growing.
|Kangaroo Island’s Remarkable Rocks are naturally sculpted formations atop a granite outcrop.|
Famous Feats: Escape to Kangaroo Island
“We recently booked a custom trip to Australia and New Zealand for a senior executive and his wife belatedly celebrating a ‘milestone’ anniversary,” says Davis. “He wanted an upscale resort where he could stay active [he’s an Iron Man competitor] yet also wanted to relax and rejuvenate. She wanted to see kangaroos. A three-night stay at the Orpheus Island Resort in Queensland was the perfect start to their journey. Located within the Great Barrier Reef, Orpheus Island stretches across the coastline and comprises a pristine National Park and surrounding World Heritage-listed Marine Park. The resort is a secluded, all-inclusive island hideaway accommodating just 28 guests, who can choose from diving, fishing and snorkeling. We then arranged a private three-day trip to Kangaroo Island with their own bush guide to satisfy her desire to view wildlife in its natural surroundings. Kangaroo Island is often called ‘a zoo without fences,’ where kangaroos, koalas, wallabies, penguins, sea lions and bird life all roam freely and this unique experience allowed them to enjoy the island from early morning to night.”