Dozens of travel agencies that were members of consortia owned by Travelbyus left to join a new agency network called Cruise and Travel Stores, started by Jack Bell, former president of BTS Travel Network.
The defections occurred as financially troubled Travelbyus laid off 51 employees, about 45% of its staff, and closed its Global Leisure wholesale division, which included the Sunmakers and Hawaii Leisure brands.
An outgoing message at Global Leisure`s toll-free line cites the economic downturn for its closure and said clients with future travel bookings will receive “written correspondence.”
Global Leisure, formerly based in Seattle, was acquired in early 2000 to be part of Travelbyus` vertical integration strategy.
Travel agents have reported problems during the past few months in receiving commissions from Global Leisure, said Bell.
One agent, Robin Murphy, Hardwick Travel, Gig Harbor, Wash., told Travel Weekly she has not received documents for a $6,000 Hawaii vacation that she paid Global Leisure for in full last May.
The departure date is Nov. 6 and suppliers have told Murphy that they have not been paid.
“I can`t get hold of anyone at the company,” Murphy said.
Against this backdrop, Bell and several BTS staffers resigned recently from Travelbyus to start the new consortium, based in BTS` old offices in Scotts Valley, Calif.
He said the ongoing problems with Global Leisure are part of the reason dozens of BTS member agencies left Travelbyus to join Cruise and Travel Stores.
“It didn`t look like the financial problems would be solved any time soon,” he said.
Gary Brown, president of Cruise & Vacation Shoppes, another Travelbyus consortium, also has left Travelbyus and might form a new consortium, according to industry sources. Brown could not be reached for comment.
Bill Kerby, chief executive officer, and other Travelbyus executives could not be reached for comment, but a company statement said Travelbyus was seeking to concentrate on its agency network and Cheap Seats, a Northridge, Calif.-based air consolidator.
In the statement, Travelbyus, a publicly traded company, also issued this warning to investors: “We continue to incur substantial losses in our operations, and consequently, we have found it necessary to regularly seek additional debt financing, often at high interest rates. No assurance can be given that such short-term financing will continue to be available to us or that we will be able to obtain long-term financing to retire our existing short-term and other debt when due.”
Travelbyus evolved during the dot-com boom, with plans to combine an online travel store with a network of agency consortia. It acquired 21 companies, including Cheap Seats, Global Leisure and travel technology companies Site Rabbit and ProSoft.
Its consortia acquisitions included Cruise & Vacation Shoppes of America, Galaxsea and International Tours.
Bell sold the 20-year-old BTS consortium to Travelbyus in April 2000.
Some of the companies were consolidated in Reno, Nev., including Global Leisure.
Bell said his new group plans to focus on cruises and tours and “use our 20 years of experience” to provide member services and attract former BTS members and other agency owners.
Joining Bell are former BTS Network staffers Tricia Bracket, vice president; Duf Fischer, general manager; Susan Fischer, cruise manager; Ken Webb, member services director, and June DeFreitas, groups manager.