Travel agencies explore the Web

Wednesday, October 27, 1999

By DAVID GOWRIE
Staff Writer

Business is booming for Web-based travel and reservation services like Priceline.com and Travelocity.

And market analysts say it's a trend that's likely to continue. By 2004, $34 billion of travel business will be transacted on the Web, according to Forrester Research, a market research firm based in Cambridge, Mass.

The rapidly changing face of the travel industry has forced even successful traditional operators to rethink their business strategies.

In 1982, Michael Brent established and quickly built an international franchise network of travel agencies.

But sensing the Web boom, Brent, president and chief executive of Travel Network, and his executive vice president, Stephanie Abrams, recently merged their Englewood Cliffs-based firm with a publicly traded company, giving them the capital to build a powerful cyberspace presence.

Now called Etravnet.com, the company is helping its franchisees around the world -- which continue to use the Travel Network name -- develop and maintain on-line reservation services, in addition to providing traditional service.

Q. What is the service offered by Etravnet's Travel Network division?

A. MB -- Travel Network basically takes people who have no experience in travel, trains them in a five-week training program, and finds them a location to build a store to the specifications that we've designed over18 years. We fully automate them with computers and all the high-tech equipment; they operate under our franchise system as a Travel Network agency.

Q. How much does a franchise cost?

A. MB -- It cost $30,000 to buy the franchise, which is a license and training. Then it costs about $15,000 for us to build a location, fully furnished and turnkey.

Q. How many franchises are there?

A. MB -- We are close to 500. There are 25 agencies in New Jersey. Total, there are 380 units domestically, and the balance are overseas. Based on surveys done by third-party publications, we are the leading franchiser of start-up agencies in the United States.

Q. What are Etravnet's annual revenues?

A. MB -- We expect by year's end to have $15 million in sales transacted within our company, not including what the franchises make.

SA -- That's $2 million coming off the Web, and the remainder is from franchise and royalty fees.

Q. Why should people buy a franchise from you?

A. MB -- Part of what we do is negotiate the deals with cruise lines, hotels, tour operators, and car-rental companies for the franchisee, using the clout of the chain to get them a better deal than they could get on their own.

Q. How have you integrated the Internet into your operations?

A. MB -- The agency receives an interactive Web site, which has booking engines so their customers can go on the site and do full bookings. The consumer can go to travelnetwork.com and find the Web site for a travel agency location that's convenient for them.

SA -- We've been in the process of bringing the franchisees on line for the last 24 to 30 months.

Q. Across the franchises, how much business comes in via the Internet?

A. SA -- The amount of business that is currently completed on the Web is small, generally less than 10 percent. Clients will find something on the Web and then contact the agency by phone, which is fine with us. Whatever works best for the client is how we want to do business.

Q. What operations do you have at your headquarters?

A. MB -- There are 21 employees here at this headquarters. We have 15 regional offices around the U.S., and 11 international offices.

Q. How many people total work within Etravnet?

A. MB -- Close to 5,000.

Q. How do you see the Internet affecting the travel industry, and what plans do you have for your business?

A. MB -- As business shifts from street business to home business and Web business, we are trying to give our franchisees that sophistication. One of the reasons we went public was to raise additional capital so that we could spend a significant amount of money on development of Web products that we will give our agencies to give them an advantage in the market place.

Our feeling now is that as Web-based business of travel becomes stronger, our agencies are going to be known as a Web-based agency with a consumer service center within their community.