What Agents are Saying About the Latest ALG, Mark Travel Merger Effects

Last week, Apple Leisure Group (ALG) announced that it will be ending its relationship with Playa Hotels and Resorts, representing the latest domino effect following the company’s acquisition of The Mark Travel Corporation (TMTC) earlier this year.

The chips began to fall in May when Funjet Vacations cut ties with Lomas Travel and Sandals Resorts International cut ties with Funjet Vacations. About a month later, Classic Vacations swooped in and announced a partnership with Lomas.

And on Friday, ALG dropping Playa became the latest, but most likely not the last, move of interest to both Caribbean and Mexico travel specialists.

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“All of these changes are enough to make one dizzy,” said Penny Sheldon, owner of Penny Sheldon Travel in Boise, Idaho. “After 25 plus years in this business, my strategy has always focused on my relationship and loyalty with my preferred tour operators.”

The most recent move means that the now-Apple/former TMTC brands such as Funjet, United Vacations, and Southwest Airlines Vacations will no longer have access to any of the Playa Resorts brands. Existing ALG brands, Apple Vacations, Travel Impressions (TI) and Cheap Caribbean, will follow suit with various Playa properties that had done business with.

In April, ALG and TMTC announced that both companies had signed a definitive agreement “to create an integrated leisure travel and technology solutions company,” according to a news release issued by both companies at the time. The transaction officially closed on May 1.

“All of the moves leave a feeling of uncertainty in a market that relies on partnership stability,” said Sheldon. “Our service to our clients is dependent on smooth-flowing, day-to-day operations."

And while some moves have been praised more than others, none of the restructuring moves following the merger, including Friday’s Playa announcement, have exactly shocked some experts in the field, like Kate Murphy, president of Wings Travel in Blue Bell, Pennsylvania.

“I wasn’t even a little surprised that [the Playa move was made] to fall into line with the rest of ALG,” said Murphy. “Whenever there is a 'parent' company involved, everyone usually has to fall in line with their rules. I’m an end-user, so I know it doesn’t matter if I approve or disapprove.”

TravelPulse recently spoke with Murphy, Sheldon and other advisors about the moves resulting in the merger so far.

Here's what they had to say, along with a recap of the deals made since the merger was first announced in April.

ALG Drops Playa

Playa's portfolio includes Hyatt Ziva, Hyatt Zilara, The Royal, Panama Jack Resorts, Jewel Resorts, Hilton Rose Hall, and Sanctuary Cap Cana. Those Playa Resorts brands will also no longer be available for sale through VAX VacationAccess.

“TI, Apple Vacations, and Funjet have been the top tour operators that Wings uses. Recently, we’ve had to spend time evaluating other tour operators to book our Sandals/Beaches, Excellence [Resorts] and [Playa requests],” said Murphy. “My question to the leaders of ALG would be, 'What if our staff prefers booking with the new tour operator better than the tour operator we’ve booked with for 30 years?' We are still going to support them because of our longstanding relationship, but every agency doesn’t have that kind of loyalty. And now we’ve had to add a new tour operator to the mix.”

However, Playa and ALG are continuing to work to see that clients get the utmost in care and current reservations will not be impacted in any way.

In a letter to partners, Kevin Froemming, executive vice president and chief marketing officer of Playa, announced that they'll continue their mission of working with travel agents and preferred tour operators and promised new and innovative opportunities for travel agents are on the way.

Froemming also noted that Playa still has relationships with many top tour operators and vacation packagers, including Flight Centre Travel Group, Delta Vacations, Classic, Pleasant Holidays, Vacation Express, American Airlines Vacations, JetBlue Vacations, Island Destinations and Sun Country Vacations.

Playa has recently done some major expansion of its own, acquiring a number of resorts to establish a dominant foothold in Jamaica. ALG, meanwhile, continues to grow not only at a fast pace but at a quickening one as well.

“The travel industry is just as corporate as any other and these things - mergers, splits, acquisitions, etc. - are bound to happen,” said Aurelio Giordano, owner of Ace World Travel, which is based in Brooklyn, New York. “At the end of the day, I'm looking out for my business and clients. As long as whatever they do will, at the least, keep the quality and pricing of their product consistent or better, I'm good.”

Sandals Cuts Ties With Funjet Vacations

In early May, Sandals Resorts International terminated its distribution agreement with Funjet Vacations. As of May 26, TMTC suspended all sales of Sandals and Beaches resorts.

"As you may have heard, The Mark Travel Corporation's long-standing contract with Sandals Resorts has come to an end. This change applies to all of our brands," a statement on Mark Travel's VAX VacationAccess website at the time confirmed. "While we know it was a difficult decision for them, we respect the decision and wish them the best in the future."

But the news wasn't a shocker to agents.

“Surprised? No, I was expecting it,” said Sheldon of the Sandals/Funjet split. “Being a family-owned company, Sandals and Beaches have always had an independent business philosophy. With that, I feel they chose to make a decision to focus on distribution partners who are more aligned with their innovative approach in the market.”

And Giordano agreed.

“Sandals dropping Funjet made sense because it's a domino effect/degrees-of-separation thing,” said Giordano. “Funjet is owned by Mark Travel, which is now owned by ALG, who owns AMResorts, which, although diverse, [includes] the Secrets [Resorts] brand, another brand that is also heavily-geared towards couples and honeymooners. Maybe they didn't want the competition to come from within.”

A similar move was made in 2015 when Sandals dropped TI about two years after the tour operator was bought buy ALG in 2013, which, as mentioned above, also owns Sandals' competitor, AMResorts.

“Considering that the sales teams behind TI and now Mark Travel/Funjet Vacations have an emphasis on AM properties, I believe it was/is construed as a conflict of interest,” said Sheldon. “AM’s leadership as a management company for individually-owned properties does not make for good 'bed partners' with Sandals. At the core, it was a very pragmatic move.”

Funjet Vacations Drops Lomas

Also in May, the owners of Lomas Travel informed its travel partners in an email that Funjet Vacations had decided to change its ground services after about 30 years of working with Lomas.

The move, according to the letter sent by owners Dolores Lopez Lira and Jose Luis Martinez, who also own Karisma Hotels & Resorts’ hotels, came as a direct result of the merger.

“Lomas Travel has been notified that due to its merger, Funjet will change its ground services to a different Destination Management Company (DMC) effective June 13,” according to the letter. “We know this decision is not a reflection of our longstanding relationship or the outstanding service we’ve been committed to providing our partners and clients over the past three decades.

Classic Vacations Partners With Lomas Travel

This was perhaps the most celebrated moved amongst the advisors TravelPulse spoke with since it was considered a happy ending to what began as a sad story for Lomas, a popular ground operator for many Mexico travel experts.

About a month after Lomas announced that Funjet was dropping its services, the company announced a partnership with Classic.

“The move that I liked the most is the Classic and Lomas move,” said Stephen Scott, an advisor with Travel Hub 365 in Chicago, Illinois. “It adds a great deal of choice to the Classic Vacations portfolio and a deeper point-to-point package experience for us to offer, which makes it easier for agents across the country to find what they need faster and with an excellent brand.”

Access to the company’s transfers and excursions, as well as other services, are now available through Classic. While Classic will now offer Lomas’ services, its primary provider in Mexico remains Mayaland Tours, which is celebrating 100 years of service.

“The key measure for me though is the customer service changes that sprout from mergers and drops,” said Scott. “If hold times fall into two - and three-hour waits and email responses extend well past 24 hours, it is frustrating, and will cause a major disruption to their business and our business alike. I will not book with a brand if this occurs as time is critical in this business.”