Change
is the travel industry’s sole constant, so last week’s news that Flight Centre Travel Group (FCTG) is shutting down GoGo Vacations, the 72 year-old
travel retail group, was unexpected but somehow not shocking.
The
closing illustrated the retail travel industry’s profound changes since at
least 1951, when former New York
University classmates Gilbert Haroche and Fred Kassner launched Liberty Travel to sell Poconos, Catskills and Florida vacations.
Kassner,
an Austrian immigrant whose family fled the Nazis in 1938, and Haroche, a New York
City native who’d served in the U.S. Navy in 1944, soon determined to deliver value-oriented
travel packages to the ordinary consumer.
In
1952, the pair created the wholesaler Keystone Tours, one year after founding retailer
Liberty Travel, which they later re-named Gogo Tours and ultimately Gogo
Worldwide Vacations.
At
the time, leisure vacations were considered primarily the realm of the wealthy.
The partners understood that blue-collar types, conversely vacationed on the Jersey shore or Wisconsin lakes but not in the
Caribbean or even Miami.
GoGo’s packages opened a new
landscape for mass-market travelers, bundling
air, hotel and car rental packages for travel to Florida and Puerto Rico for
prices targeting middle-income Americans.
“[Kassner and Haroche] were definitely of major importance and it's a little
sad to see the brand just disappear with a barely noticeable burp,” said one
industry source.
“[GoGo] could be considered
the inventor of the packaged vacation industry. I don't think anyone else could
compete with them for the title,” said the source. “They ruled that market for
a generation or two and were the model for all the big packagers who followed
them.”
By 1998, Gogo had become one
of the nation's largest tour operators and a significant player in Caribbean
travel, with 200 locations national offices and sales of $1.3 billion in sales,
according to a Travel Weekly obituary of Kassner.
Along the way, the firm came
to be viewed as pioneers of methods that in time became standard travel agency practices,
from bulk hotel rates and scheduled air reservations instead of charters.
“I’ve used GoGo for several
of my groups and always found their groups department a pleasure to work with,”
said Brenda O’Neale, owner of With This Ring Destination Weddings and Honeymoons.
“They returned quotes in a
timely fashion and I appreciated their in-destination department when issues
did arrive,” O’Neale said.
As time passed however, issues
emerged to challenge GoGo’s dominance. Agencies increasingly aligned with networks
and formed independent supplier relationships that steadily lessened their
reliance on wholesalers.
“Suppliers are increasingly
encouraging agent to book direct instead of with wholesalers and that is what I
believe we are seeing now,” said O’Neale.
In fact, Charlene Leiss, Flight
Centre’s president, cited “the wholesale model struggling in recent years,” as partially
responsible for the move to shutter GoGo.
In addition, once at the forefront
of industry innovation, GoGo seemed in recent years to be outdated in terms of
technology.
“One of the things that
prevented us from placing any business there was [GoGo’s] existing technology,”
said Tom Carr, owner of Preferred Vacations in Georgetown, Ky. “It's my belief
that they failed to embrace technology wholeheartedly and clung to what they
had.”
Carr said wholesalers like Funjet “continually evolved, keeping pace with the industry and need for
streamlining operations and leveraging of the front-line travel agent
community. GoGo failed to do that.”
The company’s attempt at a
technology solution, an automated booking platform called Helios, was not
popular with advisors.
“I saw an
agent said that up to this day she could not sign into Helios,” said Kelly
Fontenelle, CEO of advisor group Travel Advisors Selling the Caribbean (TASC). “Others
are saying not having a person to talk to was difficult.”
Indeed,
Carr called Helios “a disappointing
failure that ended any hope for a revival.”
“Change is good and technology is even better
in today’s business,” said Fontenelle, “but not being able to service your
clients when they need help can destroy your business.”
Ultimately,
a travel company that once symbolized innovation succumbed to distribution
system changes that had little to do with its operation and technological
advances to which some say it failed to adapt.
Clearly
all things change with time.
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