January 2006
Best Practices: Association buys for-profit show
Why TIA leveraged a $6 million cash reserve to pay cash for TravelCom
By Cathy Chatfield-Taylor

In the three short years that JD Events (www.jdevents.com) owned the Travel Commerce Conference and Expo (TravelCom, www.travelcomexpo.com), participation swelled to 1,300 and revenues grew by 300 percent. Still, despite notoriety for incubating shows to sell, CEO Joel Davis wasn’t ready to relinquish the startup when it became an acquisition target for the Travel Industry Association of America (TIA, www.tia.org) last year.

“It’s true that at the time we were approached by TIA, we were not actively selling TravelCom,” Davis says. “Our position was simple. We were perfectly happy to continue running the event and enjoying the profits ourselves if we could not reach a fair price.”

How did TIA convince him the association could provide the perfect home for TravelCom? They made an offer he couldn’t refuse. 

“We knew we had to be in the business. We were either going to buy a show or start a show,” says TIA President and CEO Roger Dow. “We have a solid association, despite all that we’ve been through since 9/11. We do $14 million a year in revenue from various sources. In addition to that, we have a $6 million reserve. We were in a good cash position.”

Representing the $600 billion U.S. travel and tourism industry with 2,000 member organizations and a coalition of 36 travel industry associations, TIA acknowledges that its own flagship event, the 38-year-old International Pow Wow, succeeds at one-on-one sales but misses the e-marketing mark.

“When it comes to building travel into the United States, the Pow Wow is the foremost show for doing one-on-one sales appointments with travel providers around the world,” Dow says. “That said, there is no e-commerce component. This is an area we need to expand.”

With its heavy emphasis on Internet marketing and distribution, TravelCom fills that gap. “By owning it, we have an opportunity to grow it,” Dow says.

Backed by TIA’s significant resources, TravelCom could double within a year. TIA is using existing meeting and event staff to run the show, which will stay in New York City but have twice the space available at the Hilton New York, April 17–19, 2006. To bring in more travel buyers, TIA will leverage strategic partnerships with The National Tour Association, Destination Marketing Association International, Hospitality Sales and Marketing Association and others.

 “The show goes after a market segment where we had additional member growth opportunities,” says Chief Operating Officer Mike Pusateri. “It’s a very viable show, but it’s heavy on the vendor side. We want more industry players there.”

Based on guidance from an e-commerce committee comprised of the “who’s who” in e-commerce and travel, the association also plans to bring in more high-caliber speakers and land sponsorships for amenities such as full breakfast service.

“The result for attendees will be a more upscale experience,” says Pusateri. “JD Event’s mission was to grow to sell. Ours is attendee satisfaction — food, logistics, how easy it is to get around, education. We hope our attendee satisfaction will go up in a big way.”

Acquiring TravelCom will enable TIA to realign with the way business is now done in the travel industry. Nearly 80 percent of leisure travelers do online research, and 35 percent book hotels online. The global travel distribution system is growing fast, Dow says, and TravelCom will grow with it.

“Profits will go back into programs for members and creating more clout in government affairs,” Dow says. “This [acquisition] allows us to broaden our services without raising dues substantially.”