James Shillinglaw | April 27, 2015 12:33 PM ET
Is Avoya Travel On Track For $1 Billion?
It's one of the most successful host agencies in the business with a unique model that is notching up record leisure travel sales, especially in the cruise segment.
I'm talking about Avoya Travel, an American Express host agency that has been on a tear for well over a decade as it transformed itself from a full-service travel agency selling corporate and leisure travel into one that hosts more than 500 independent affiliates all focused on leisure sales.
Last week I sat down with Brad Anderson, Avoya’s co-president, and Scott Koepf, its senior vice president of sales, during CLIA’s cruise3sixty conference in Fort Lauderdale. According to Anderson, the host agency just finished a first quarter where sales were up 25 percent, which he says will put it on track for a record $500 million in leisure sales. Indeed, he says if all goes well in the industry overall, Avoya will achieve such record results as early as 2016. And by the end of the decade, Anderson says, Avoya could be on track to achieve $1 billion in leisure sales.
Now this could all be a bit of hyperbole on Anderson's part, but Avoya has been winning top sales awards from nearly every major cruise lines and several other suppliers for a number of years now, so I tend to believe his agency is indeed producing these lofty numbers. On the other hand, Avoya's books are certainly not open to the public.
Anderson says Avoya hasn’t achieved these results by adding large numbers of independent affiliates (the agency has always been cagey about how many affiliates it actually has, saying it’s more than 500 but less than 1,000). Instead, he says Avoya has focused on boosting the productivity of those affiliates—and that production just keeps going up.
Avoya works through a patent-pending Live Leads program for its independent affiliates—and those leads are getting better and better, according to Anderson, making it much easier for those affiliates to close sales. Avoya spends millions of dollars on online marketing and also works directly with key preferred suppliers to generate leads for its affiliate agents.
The agency also has independent affiliates who are not just specialists in a particular niche, but are focused on selling one or more brands. Leads are driven based on performance to the top sellers of specific brands in just minutes if not seconds. Indeed, that Live Leads program has been patent-pending for the past seven years, but Anderson says the agency believes it will finally get its patent from the government this year—a milestone he says will be cause for celebration.
Anderson also is quick to point out that Avoya doesn’t have any internal salespeople working directly with customers, meaning all sales come from independent affiliates. "We don't compete against our independent affiliates," he says. Those affiliates also get their commissions on a weekly basis when their customers make a deposit on their trips, providing them with much better cash flow, Anderson says.
Koepf says the agency’s independent affiliates increasingly are focusing on high-end and better yielding products, boosting their individual sales and their own profits. The number of independent affiliates producing over $1 million in sales increased 27 percent in 2015, he says, and the number of affiliates selling over $2 million also is growing.
At the same time, Koepf maintains that Avoya works with a number of different agency models. Many are individual home-based agents, while others are office-based working with their own affiliates to produce more sales. Of course, Avoya’s own model may not be for every home-based agent, but it certainly is proving to be profitable for many of its independent affiliates.
With a record $500 million in sales looming and $1 billion projected by the end of the decade, you would think Avoya might be satisfied with its results, but Anderson, Koepf and team clearly are not. “It took us a decade to get to where we are today and it already is a good system,” Anderson says. At the same time, he maintains Avoya will continue to change and evolve just as it has over the past decade. “We have something incredibly unique, but we are 100 percent not satisfied,” adds Koepf.
Indeed, over the past few years Avoya has ventured well beyond its core cruise sales focus into escorted tours, all-inclusive resorts and river cruising—and it’s even developing a new system to sell air travel. “The biggest opportunity for growth is land,” Koepf says. And once Avoya gets truly rolling on its land business, can $2 billion in sales be very far off?
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