The Mark Travel Corporation

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The Mark Travel Corporation

8907 North Port Washington Road
Milwaukee, isconsin 53217
U.S.A.
Telephone: (414) 228-7472
Toll Free: (800) 715-4030
Fax: (414) 934-1589
Web site: http://www.marktravel.com

Private Company
Incorporated: 1983
Employees: 2,300
Sales: $266.4 million (2005 est.)
NAIC: 561520 Tour Operators

The Mark Travel Corporation is a Milwaukee-based private company that sells leisure travel packages to more than 200 destinations through 16 travel companies. The flagship brand, and founding company, is Funjet Vacations, specializing in vacations to 60 destinations in the United States, the Caribbean, Mexico, and Europe. Mark Travel also offers vacation packages in partnerships with United Airlines, Midwest Airlines, Southwest Airlines, and the MGM MIRAGE family of Las Vegas and Biloxi, Mississippi resorts. Mark Travel is owned and operated by Chairman William La Macchia and his family, part of La Macchia Enterprises.

EARLY 20TH-CENTURY ROOTS

Bill La Macchia was born into the travel business. His grandfather, Eugenio La Macchia, was an Italian immigrant who settled in Kenosha, Wisconsin, in the early years of the 1900s, where he opened a grocery store. As a sideline he began to sell steamship tickets to fellow immigrants bringing family members over to the new world as they could afford to do so. His son Edmund, a Marquette University graduate, turned the endeavor into a full-fledged business in 1931, launching La Macchia Travel to serve primarily Italian immigrants, offering steamship tickets and railroad tickets, as well as notary services, translation, accounting, and other help that newly arrived immigrants might need to navigate an unfamiliar government bureaucracy. The agency became involved in airline ticket sales in the early 1940s, a business under the direction of his wife Emma. Airline tickets would soon supplant the Trans-Atlantic Steamship business in importance and begin to experience strong growth in the 1950s. Edmund and Emma's eldest son, Eugene, another Marquette graduate, became involved with the family business, which underwent a major change in the 1960s. No longer did the La Macchia family business focus on immigrants, instead taking advantage of the rise of the leisure vacation market to become involved in leisure travel, as well as corporate travel.

Unlike his elder brother, Bill La Macchia did not go to college, preferring to go to work at the American Motors plant in Kenosha, taking a job on the assembly line. In 1963, at the age of 21, he joined the family travel agency, becoming a manager. With his brother in line to take over one day, Bill La Macchia broke away four years later, answering a newspaper ad to find work with Manpower Inc.'s travel services subsidiary, Travelpower. He would become the head of the opera-tion and over the years grow increasingly frustrated with the wholesale tour companies with which he dealt. In response, he founded a wholesale division at Travelpower in 1974 called Funway Holidays. In the first year it booked more than 10,000 travelers. The company's methods were hardly high-tech. At the time, La Macchia told TravelAge West in a 2004 profile, "Everything was done manually on cards. We had a big grease board that showed available bookings and the phone wasn't very efficient. It was cumbersome and there was lots of room for errors." In 1975 a charter airplane division called Funjet was added to Travelpower's assets. When Parker Pen acquired Manpower in 1976, La Macchia and a Manpower executive named James Scheinfeld, who provided the funding, bought the Manpower travel assets, forming Travway, Inc. By now Funway was booking more than 100,000 vacations, warranting the opening of an office in Las Vegas in 1977. In 1979 Funjet began selling vacations to Mexico.

STRIKING OUT ON HIS OWN: 1980

La Macchia became a solo operator when he and Scheinfeld divided the business in 1980, with La Macchia taking the wholesale operations, Funway Holidays and Funjet. The Mark Travel Corporation was formed in 1983 and Funway Holidays and Funjet were folded into it. The two subsidiaries were merged in 1986, becoming Funway Holidays Funjet.

Funway Holidays continued to prosper packaging Las Vegas tours, and in 1982 was recognized as Tour Wholesaler of the Year by the Las Vegas hotel and motel industry. To this point Milwaukee was the only origin city, and destinations were limited to Las Vegas, Orlando, and Mexico. In 1982 the company began a diversification bid by opening a service office in Denver to establish a second origin market. Moreover, Funjet, which had been booking seats on scheduled air flights now began chartering its own jets. More origin cities and destinations would now be added at a steady clip. "We wanted to control our own destiny," Bill La Macchia explained to the Business Journal-Milwaukee. A Chicago service office was opened in 1985, and Dallas and Houston service offices were added in 1988. Mark Travel closed the decade with another expansion of its business, selected to operate Southwest Airlines Vacations. Also in 1989 Funjets began scheduling regular charters to Mexico.

By the start of the 1990s, Mark Travel had more than 40 origin cities and more than 200 destinations. It added United Airlines as a partner in 1990, taking over the back office operations for the airline's vacation program, handling reservations. In 1994 Mark Travel assumed complete control of the travel business, including product design, promotion, and marketing. United Vacations, established in 1984, offered trips to Hawaii, the Orient, Europe, Mexico, and the Caribbean, as well as a number of U.S. destinations. The airline continued to control seat inventory and pricing, however. In the meantime, Funway Holidays International was established in 1992, a London service office was opened, and Funjet began providing service to Europe. In 1993 Mark Travel began operating another airline wholesale operation, US Airways Vacations, and in that same year opened a San Diego service office. Funway changed its name once again in 1994, 20 years after its founding, becoming Funway Vacations. A year later the company opened a Des Moines service office. By the end of 1995 Mark Travel had annual passenger volumes in the 1.5 million range, and sales volume exceeded $500 million.

The second half of the 1990s was punctuated by the steady acquisition of other travel companies to expand the Mark Travel portfolio. Mountain Vacations, a Denver-based ski operator, was acquired in 1996. Established in 1987, Mountain Vacations packaged ski vacations to U.S., Canadian, and European destinations. In another 1996 development, Mark Travel and MGM MIRAGE forged a joint venture, MGM MIRAGE Vacations, to package tours to MGM MIRAGE's Las Vegas properties: MGM Grand, Mandalay Bay, THEhotel, The Mirage, Treasure Island, Monte Carlo, New York-New York, Luxor, Excalibur, and Circus Circus, as well the Bellagio under construction in Las Vegas and the soon-to-open Beau Rivage in Biloxi, Mississippi. In 1997 Mark Travel added Pleasure Break Vacations, a 25-year-old Rolling Meadow, Illinois tour and charter operator that offered vacations to Mexico, the Caribbean, Belize, Costa Rica, and Europe. The products were sold exclusively through travel agents, catering mostly to residents of Illinois, Indiana, Iowa, Wisconsin, Minnesota, and western Michigan.

COMPANY PERSPECTIVES

The people of The Mark Travel Corporation proudly service 2.6 million vacationers each year. Superb care has been our business for 30 years. That's why 16 leading vacation companies trust their customers to us.

SUN COUNTRY AIRLINES ACQUISITION: 1997

Also in 1997 Bill La Macchia and Mark Travel became involved in the airline business, paying $41 million to acquire a 75 percent controlling interest in Minneapolis-based Sun Country Airlines. The charter outfit had been a profitable venture for the past 16 years, and now transported about three million passengers a year in its 15 jets. Again, the idea was to control Mark Travel's destiny by securing more reliable access to airline seats, but Bill La Macchia proved to be out of his element in the airline business. Almost immediately he had to contend with expected losses, and then he made the mistake of directly taking on Northwest Airlines, which dominated the Minneapolis market but was grounded in 1998 because of a pilots' strike. For a time Sun Country benefited from Northwest's misfortune. Unfortunately for Mark Travel, La Macchia's plan to sell seats to other charter companies did not pan out because major airlines began to poach on this business, and when Sun Country began offering scheduled flights in 1999 to compete with Northwest it was unable to survive an ensuing price war. After losing more than $100 million in three years, Sun Country suspended all scheduled flights in December 2001 and reverted to charter service only, leading to mass layoffs. Sun Country would not, however, charter flights for Mark Travel or anyone for some time. It soon filed for bankruptcy protection and in 2002 was sold to an investment group for about $5 million and began a comeback under new management.

During—and despite—the travails of Sun Country, Mark Travel continued its expansion spree during the late 1990s. In 1998 it bought Hamilton, Miller, Hudson & Fayne Corp., a Detroit-based charter operator, and Albuquerque-based Blue Sky Tours. Founded in 1981, Blue Sky sold scheduled air products to Hawaii. Also in 1998, Mark Travel entered the Canadian market by acquiring a 49 percent minority interest in Conquest Tours Limited, a Toronto vacation charter flight company. Origin cities included Calgary, Edmonton, Toronto, Vancouver, and Victoria. Destinations included Florida, California, Las Vegas, and Hawaii in the United States, and overseas to the United Kingdom, Ireland, Europe, and Australia. Another important development in 1998 was Mark Travel's international subsidiary establishing inbound programs to the United States from more than 30 other countries. In 1999 Funjet celebrated its 25th anniversary by expanding the flights for its Las Vegas vacations to seven days a week and adding a new destination: Punta Cana, Dominican Republic. Mark Travel also supplemented its Las Vegas business by acquiring sightseeing company Showtimes Tours, and its Mexico business by adding AeroMexico Vacations. In addition, Minneapolis charter company TransGlobal Vacations was purchased.

Mark Travel lined up another influential partner in 2000 when it formed a 50-50 joint venture, eLeisure Network, with Carnival Corp. The subsidiary was established to market and distribute the products of both companies over the Internet, targeting travel agents and their clients. Also on the technology side, in 2000 Mark Travel spun off its information technology division, Trisept Technology, which became Trisept Solutions. Trisept had been responsible for developing the booking agent engine, VAX VacationAcess, used by eLeisure and others, as well as software used by Sun Country and the Las Vegas Convention and Visitors Authority, which needed a way to track hotel room bookings. But Trisept's ties to Mark Travel had proven to be a drag on its growth. It was pigeonholed by potential clients as a software company limited to vacation packages rather than a travel industry generalist. There was also a problem with conflict of interests, preventing Trisept from taking assignments from Mark Travel's competitors.

In the early months of 2001 Mark Travel continued to add to its stable of brands, acquiring three businesses from Dallas-based Sammons Enterprises. It acquired Adventure Tours USA, a 30-year-old Dallas-based company that sold vacation packages to Florida, western United States ski destinations, Mexico, Costa Rica, and the Caribbean. Other additions in June 2001 were Town & Country Tours of Phoenix and Buffalo's Santo Tours. Adventure Tours would be allowed to operate as an independent entity in Dallas, but Town & Country was relegated to a Mark Travel brand and Santo Tours was folded into Funjet Vacations.

KEY DATES

1974:: Bill La Macchia founds Funway Holidays as a Travelpower division.
1976:: La Macchia and partner acquire Travelpower assets and form Travway, Inc.
1980:: La Macchia and partner divide the business.
1983:: Mark Travel is formed.
1992:: Funway Holidays International is established.
1994:: Mark Travel begins operating United Vacations.
1997:: Mark Travel acquires Sun Country Airlines.
2002:: Bankrupt Sun Country is sold.

As was the case with most companies involved in the travel industries, business was severely impacted by the terrorist attacks that took place on September 11, 2001. In the aftermath, Americans were especially reluctant to fly to destination sites. Forced to adjust to this difficult climate, Mark Travel within the month laid off more than 20 percent of staff across the country, including the entire 150-employee reservation center in Bloomington, Minnesota, in early October, and another 350 people, mostly at its headquarters. The drop in travel also sounded the death knell for Sun Country Airlines as it lapsed into bankruptcy before the year was out.

Over the next few years Mark Travel and the travel industry rebounded as separation occurred from the events of September 11. In 2003 Mark Travel was tabbed to operate Midwest Airlines Vacations. By now Bill La Macchia's son and namesake was a seasoned travel executive and serving as Mark Travel's chief operating officer. Bill La Macchia also turned over the presidency of Funjet to Ray Snisky in 2004. The young La Macchia denied that a changing of the guard was taking place in an interview with Travel Weekly, maintaining, "This is just an evolution of the vision that my father had when he started this company 30 years ago, to be the kind of tour operator that he wanted to do business with when he was a travel agent—and we accomplished that."

PRINCIPAL DIVISIONS

Adventure Tours USA; AeroMexico Vacations; ATA Vacations; Blue Sky Tours; Funjet Vacations; Mark International; MGM MIRAGE Vacations; Midwest Airlines Vacations; Mountain Vacations; Southwest Airlines Vacations; Spirit Vacations; TransGlobal Vacations; United Vacations.