Liberty Travel, Inc. History

Address:

69 Spring Street
Ramsey, New Jersey 07446
U.S.A.

Telephone: (201) 934-3500
Fax: (201) 934-3651

Website: www.libertytravel.com

Private Company
Incorporated: 1951
Employees: 2,500
Sales: $1.4 billion (2001 est.)
NAIC: 561510 Travel Agencies

Company Perspectives:

The buying power of Liberty Travel is second to none. Our unmatched volume means exceptional vacation values and savings that could only be offered by an organization of our size and prestige.

Key Dates:

1951:: Liberty Travel is founded, offering complete vacation packages to Miami Beach.
1959:: Liberty promotes travel packages to Hawaii, the Caribbean, Mexico, and Europe.
1970:: The company provides travel services through 19 offices in New York City, plus offices in New Jersey, Pennsylvania, Connecticut, and Florida.
1988:: Liberty initiates its first television advertising campaign.
1993:: Liberty is the first travel agency to offer air travel on sale.
1994:: Sales reach $900 million through 171 travel offices.
1995:: An Internet site is launched.
2001:: Liberty introduces online booking for cruises.

Company History:

Liberty Travel, Inc. is the largest privately owned retail leisure travel agency in the United States. Liberty's travel agents sell primarily vacation packages, particularly those available through its sister company, wholesale travel provider GoGo Worldwide Vacations. Through extensive newspaper advertising, Liberty offers complete vacation packages inclusive of airfare, hotel, local transportation, and, in some cases, sightseeing and meals. Travel packages are available for destinations throughout the world and many cater to specific interests, such as skiing, golf, scuba diving, gaming, history and culture, adventure, spa and health resorts, romantic getaways, and family and singles vacations. Liberty agents provide corporate and group travel services as well. The company operates more than 200 travel offices in ten states, located primarily in New York, New Jersey, and Pennsylvania, with additional offices in Massachusetts, New Hampshire, Connecticut, Rhode Island, Delaware, Virginia, Maryland/Washington D.C., and Florida. At the company's web site, travelers can book cruises and vacation packages to the Caribbean islands, Bermuda, Mexico, Central America, Tahiti, Europe, and destinations throughout the United States. More than 60 travel agencies are affiliated with Liberty through a unique alliance program.

1950s Origins

Liberty Travel started in a small, one-desk office on 42nd Street in Times Square when founders Fred Kassner and Gilbert Haroche introduced to the travel market the idea of a complete vacation package, including transportation, hotel, and hotel transfers. The key component of this new concept involved pricing travel packages to resort destinations at rates affordable to the middle class. Kassner and Haroche accomplished this by negotiating special volume rates with hotels and, later, transportation companies. Their first organized package trips took customers to the Catskills Mountains in upstate New York and to Miami Beach, Florida. Liberty's success relied on newspaper advertisements to promote the low package rates. The company's first advertisement to appear in the New York Times, on December 23, 1951, promoted an eight-day trip to Miami Beach via train or plane for $99 per person plus tax, including hotel and taxi transportation to and from the hotel.

Liberty prospered in the 1950s, especially as commercial air travel became a regular part of American life. Kassner and Haroche brought mobility to the masses by making long distance vacation travel affordable to a growing, prospering middle class. By successfully selling low-cost packages at low season, the men enhanced their relationships with hotel operators who then provided Liberty with high-season reservations. Kassner and Haroche formed GoGo Tours to handle the wholesale aspect of the business, operating Liberty as a retail travel agency, specializing in popular honeymoon destinations and offering regular travel services in addition to selling packaged vacations.

By the end of the decade the company offered vacation packages to Europe, Mexico, Hawaii, Bermuda, and several Caribbean islands, such as Puerto Rico, the Bahamas, Jamaica, the Virgin Islands, and Barbados. Specialty trips to Europe included tickets to London theater productions and Moscow ballet. Newspaper advertisements continued to play an essential role in promoting low package rates and attracting customers. In the New York Times Liberty placed as many as four advertisements on different pages. A quarter-page advertisement that appeared in the New York Times on December 6, 1959, suggested several vacation options, while smaller ones focused on specific destinations. One of the four advertisements promoted a trip to Waikiki Beach in Honolulu, Hawaii, starting at $720 per person. The 16-day package included air transportation from New York City, hotel, and sightseeing; the trip included two nights in Los Angeles on the outbound trip and two nights in either San Francisco or Las Vegas on the return trip.

Although Liberty was criticized for using low rates to attract customers through advertising, its customers were clearly satisfied with available rates, given that the company grew and expanded. Liberty opened travel offices in Philadelphia and Miami Beach as well as in the Brooklyn and Queens areas of New York City.

In addition to attracting customers through low rates, Liberty applied other strategies, such as keeping its offices open every day of the week and offering the free use of Polaroid land cameras while on vacation. Another method Liberty used to attract a large volume of customers involved group and incentive travel. In the early 1960s the company advertised a free travel opportunity to an individual who planned a group trip for 15 friends or members of an organization; the person who initiated the trip traveled to that destination free of charge.

During the 1960s Americans became more experienced travelers and Liberty expanded its travel options, arranging package trips to more exotic or culturally interesting locations around the world, such as Tahiti, Tokyo, and Israel. While GoGo Tours, Inc. handled the wholesale operation of formulating vacation packages, Liberty's retail agents accounted for a large portion of sales at GoGo. Liberty expanded to accommodate new customers, opening several retail travel offices, for a total of 19 offices in New York City by 1970. Liberty opened offices in New Jersey, Connecticut, Pennsylvania, and Florida, as well as other areas of New York.

Competitive 1980s

Liberty endured and even prospered through many changes in the travel industry during the 1970s and 1980s. The energy crisis and a poor economy in the mid-1970s kept many people close to home. Deregulation in the 1980s resulted in a competitive atmosphere that resulted in lower airfares and, therefore, lower commissions to travel agents. The wider range of travel services, beyond airline ticketing, and the emphasis on low-priced vacation packages enabled Liberty to prosper and expand. In 1986 the company operated 130 travel offices in eight states and generated approximately $600 million in travel sales. Liberty accounted for approximately two-thirds of the sales volume at GoGo, receiving just less than $100 million in commissions from GoGo.

Liberty's advertising strategy continued to emphasize newspaper advertising as a means to reach a mass audience. The company reduced its level of advertising in the New York Times during the 1970s, but returned to an aggressive strategy as the economic situation improved during the 1980s. In 1987 the company spent $13.9 million placing advertisements in newspapers nationwide, including 23 newspapers in the East. A full-page and five to ten quarter-page advertisements appeared in the New York Times every week.

Liberty participated in cooperative advertising with travel suppliers, either by being listed among other travel agents for a destination advertisement or by placing known brands and their logos in Liberty's print advertisements. A full-page advertisement in the New York Times could mention a national weekly rate for a car rental company, airlines involved in a package trip, or the rate for a specific destination hotel. All Liberty travel offices were listed at the bottom of the advertisements.

In the competitive atmosphere of the 1980s, Liberty began to experiment with a new form of advertising, interactive video kiosks. The videos showed views of popular resort destinations and offered a range of travel packages that could be purchased at the kiosk with a credit card. In 1987 Liberty placed ten kiosks in high traffic areas, such as airports, where the kiosks served customers making last-minute travel plans.

In 1988 Liberty initiated its first television advertising campaign, placing more than 25 commercials on New York City stations. The $3 million campaign focused on a one-week Hawaii package, including air transportation on American Airlines and a choice of 20 hotels. Liberty supplemented the television commercials with a quarter-page advertisement in the New York Times.

1990s: Innovation in Travel Promotion

During the early 1990s Liberty took an aggressively competitive stance in the travel industry by offering vacation packages at sale prices. In May 1993 the company offered 50 percent off of the lowest available airfares to more than 25 destinations, including popular resorts, when the customer purchased a vacation package. The "Super Summer Sale," which ran the first two weeks of June, was the first time a retail travel agency offered air travel on sale.

The following year Liberty held similar sales. In conjunction with American Airlines, Liberty offered 35 percent off of air and hotel for Caribbean travel packages sold over four weeks beginning May 15 for travel between September 1 and November 19, 1994. From June 23 to June 26 the company held a cruise sale, with 18 cruise lines participating in the event.

To get an early foothold in the holiday travel market for the 1994-95 winter travel season, Liberty pre-purchased and reserved more than 10,000 airlines seats for travel during the Thanksgiving, Christmas, New Year's, and Presidents Day holidays. The seats covered travel packages to five Florida cities, Puerto Rico, Jamaica, St. Maarten, Hawaii, Las Vegas, Rome, and Athens.

As a strong economy in the 1990s increased demand for luxury vacations, the company decided to upgrade its offices and service. The company refurbished its offices, adding plush deck chairs for customer seating, and began to feature luxury accommodations and golf resorts in glossy travel brochures. The company developed its customer service training to emphasize open-ended questions in order to obtain information about customer travel interests.

Using the latest technology to promote its travel services, Liberty launched an Internet site in the fall of 1995. The web site provided information about travel destinations, hotels, and activities; customers could book travel by calling a toll-free telephone line or through one of more than 190 Liberty travel offices in nine states, including 33 offices in New York City; offices could be found by using an online locator feature. The site featured an interactive map and a free live chat room where travelers exchange ideas and share their experiences.

As new Internet technology developed, the web site provided real-time rates and availability and allowed customers to book vacation packages online. In 2001 Liberty launched a new web site in August, implementing Openpages' ContentWare. The software allowed Liberty to update and change web site content more readily, providing customers with more up-to-date information. Liberty licensed ProCruise, a cruise line booking tool that allowed customers to book a cruise through Liberty's web site. ProCruise allowed the company to provide real-time availability as well as deck plans and photos of cabin accommodations. Liberty added a custom weather forecast capability as well, providing weather reports to clients' travel destinations.

Challenges in the 21st Century

Liberty planned to continue expansion through the acquisition of small travel agencies and issued a press release in July 1996 that expressed the company's interest. Although 1,100 travel agencies responded, most were too costly to acquire, with only about 1 percent worth acquiring. Liberty developed an alternative to growth through acquisition by introducing an alliance program, offering owners of small travel agency owners an alternative to the difficulties of the times. Many travel agencies struggled with the advent of electronic ticketing and commission caps in the late 1990s. A slow economy and a soft travel market were exacerbated by the attack on the World Trade Center.

Introduced in 2002, the alliance program sought to create mutually beneficial relationships by offering agency owners an opportunity to take advantage of Liberty's profitability. The program allowed agencies the protection of a larger company by becoming independent contractors or full-time employees with health benefits and a 401k plan. Another option, the "royalty plan," provided a commission to retired agency owners. To participate in the program Liberty had three requirements: that the agency be located within 15 miles of an existing Liberty Travel office; that the travel agent have three years of leisure travel experience; and that the agency owner or independent agent be based in the United States. More than 60 agencies affiliated with Liberty within the first year.

Liberty took a new approach to travel advertising in 2002, adding a human face to convey the idea that Liberty provides not only travel information, but also offers assistance in making travel decisions. One advertisement featured an agent from the company's Philadelphia office and used a quote by that agent. Kay Howard is shown with the quote, "Vacations packages come in all shapes and sizes. Finding the right one for my clients, that's what I do best." (Adweek Western Edition, February 4, 2002, p. 31) The campaign involved ten different newspaper advertisements and featured the tagline, "Where travel begins."

In early 2003 Liberty joined a cooperative promotional effort initiated by the Mexican Tourism Board. Liberty's participation in the program involved print advertising in 44 newspapers nationwide and television commercials on 16 cable channels, such as the Travel Channel and the Discovery Channel. Mexico travel destinations promoted by Liberty included Cancun, Acapulco, Puerto Vallarta, Riviera Maya, and Los Cabos. The program tagline, "Closer Than Ever," implied the warmth of Mexican culture as well as the preference of Americans to stay close to home, given fears of terrorism, war in Iraq, and the outbreak of the SARS virus in Asia. Although Liberty could not measure the success of the Mexican Tourism Board promotion, popular travel destinations at this time included Mexico, as well as Hawaii, Las Vegas, and the Caribbean.

Principal Competitors: American Express Company; Carlson Wagonlit Travel, Inc.; WorldTravel BTI.

Liberty Travel, Inc. History

Company Perspectives:

Key Dates:

Company History:

Further Reading: