Around the World

Around the World

entrepreneurs by Mark Gordon | Managing Editor

In the high-stakes world of running an international travel agency, it helps to be opportunistic. Never take no for an answer.

Ryan and Malaka Hilton have heard it many times: The travel agency industry is a dinosaur, a soon-to-be relic of the days before the Internet, when a neighborhood travel agent was as common as a diner lunch counter or a working phone booth.

While the industry has indeed suffered, its demise has barely registered with the Hiltons or the Sarasota-based agency they have run since 1997, Admiral Travel Gallery. Instead, the husband-and-wife team has been busy building Admiral into an agency with an international reputation by assembling high-end and exclusive trips for clients as far away as California, Chicago and New York.

The company's revenues climbed at least 10% a year for three consecutive years through 2006, when it reached $10 million. And its 2007 revenues were up 30% from 2006, to $13 million. The firm has six full-time employees, including the Hiltons, as well as a stable of 10 freelance contractors.

The genesis of how the Hiltons survived, even prospered, as their industry shriveled around them, stems from a risky decision Malaka Hilton made three years ago. That's when Hilton, Admiral's founder and chief executive, decided she had to overhaul, not tinker, with the business plan in order to achieve sustained growth. "We decided we had to make a change," Malaka Hilton says.

The plan was to create an exclusive catalog of trips and experiences that people could only get by booking through Admiral. They would still book trips such as luxury safaris in Africa and tours to the Egyptian ruins, many of which they personally led. And they would still book meeting and event trips, too. Both of those ventures provided solid sales.

But with exclusivity as the plan's lynchpin, the Hiltons scored several major coups with what they now call their "travel partners." Says Malaka Hilton: "We have come up with things that no other agency in the world I know of has done."

Outer Space

Today, an Admiral client can choose between packages as diverse as walking tours led by Sir Winston Churchill's granddaughter, Celia Sandys, who plans to trace her grandfather's famous journeys to places such as Morocco and South Africa during two separate trips in 2009; a trip to Japan with chef Roy Yamaguchi, a popular food author and restaurateur who founded the Roy's restaurant chain, now owned by the Tampa-based parent of Outback Steakhouse; and a trip to Turkey with Yamaguchi and Salvatore Ferragamo, grandson and namesake of the famous Italian shoe designer, who now runs a vineyard in Tuscany.

The trips involving Ferragamo, a celebrity-like figure in European fashion and cuisine circles, is a testament to the Hilton's opportunistic, don't-take-no-for-an-answer attitude. Ryan Hilton heard Ferragamo was a guest on a cruise they both were on last year, so Hilton simply tracked him down and pitched him on a partnership. Ferragamo loved the idea.

"Private access and exclusive experiences are a very important part of what we do," Ryan Hilton says. "That separates us from the competition."

And speaking of exclusives, there's this: Ryan Hilton has been training to become an official space travel agent, through the Virgin Galactic Space Ship program run by British entrepreneur Richard Branson. Hilton recently traveled to Philadelphia, where he and 50 other travel agents went through simulations at the National Aerospace Training and Research Center that included experiencing zero gravity and G-force speeds.

Hilton is the only travel agent on the Gulf Coast enrolled in Branson's program, which could begin running suborbital space flight trips for non-astronauts within a few years. Tickets, which cost as much as $200,000 depending on the seat and reservation, are already being sold.

A good deal

Partnership affiliations have been the lifeblood of Admiral's business transformation - and not just the ones with celebrity chefs and Winston Churchill's granddaughter. In the past few years, for example, Admiral has signed customer-sharing agreements with two travel entities that have served to further promote the agency's trips and products.

One deal was with Virtuoso, a high-end, invitation-only travel network that's akin to having an American Express Platinum travel credit card, but with more exclusive options. The second agreement Admiral signed was with Starwood, the international hotel conglomerate behind brands such as St. Regis, Westin and W Hotels.

The Starwood deal, which allows the hotel company's elite-level customers to cash in their frequent travel points toward Admiral's packages, is somewhat unorthodox for the travel industry. In addition to shrinking, the fragmented marketplace isn't known for customer sharing arrangements, especially ones that combine travel points.

Indeed, Malaka Hilton says she had reservations about the arrangement at first, worried it would limit her client's hotel options. But now she considers Starwood an invaluable partner, with several luxury hotel options. Adds Hilton: "Now our products are put forth in an area we would never be in touch with."

All of this luxury comes with a steep price though, especially considering the current economic climate. The Yamaguchi led trip to Japan scheduled for September 2009 starts at $7,950 per person, for example, while the "Chasing Churchill" trip to Morocco, scheduled for Oct. 20-27, starts at $5,950 per person. Those fees don't include international airline tickets.

The key to generating sales for these and other trips is the company's contingent of independent contractors. They are a group of travel agents - some experienced, others coming from another industry, such as real estate - who have the ability to market and sell some of Admiral's exclusive trips to clients. In return, Admiral provides back-office support, computer assistance and training. And if the agent closes a sale of an Admiral-exclusive trip, the agency pays out a commission.

The independent-contractor model is the newest trend in the travel industry and the Hiltons' plan to grow that aspect of their business this year and into 2009. The Hiltons declined to disclose commission rates, as it varies widely depending on the trip and agent.

Gorillas in the Mist

Training others on the art of selling luxury international travel is a relatively easy task for the Hiltons since both Ryan and Malaka Hilton led globetrotting lives long before Admiral.

Malaka Hilton, 37, was born in Minnesota, the daughter of an Egyptian-born doctor who ran medical symposiums worldwide. Hilton's father worked for the famed Mayo Clinic in Rochester, Minn., for a few years before moving the family to Sarasota when Hilton was a young child.

Hilton frequently joined her family on her father's trips. By the time she was four years old, she had been to Egypt; by eight she had been to Japan; and by 12, she was wandering the streets of Moscow. She did spend enough time stateside to earn a bachelor's degree in hospitality from Florida State University in the mid 1990s. A few years later, she opened Admiral, in a small storefront on Palm Avenue in downtown Sarasota.

Hilton, then single, went on a scouting trip to South Africa in 1997, preparing for a medical conference she was going to host with her father there. She also made time for a safari where her guide would turn out to be her future husband.

Ryan Hilton, 34, was born to be a safari guide. A native of Zimbabwe, Hilton's uncle was a professional hunter, so the younger Hilton and his cousin spent vacations and summers in the African bush while growing up. Hilton worked for a company in Zimbabwe that rebuilt old safari vehicles and later worked and lived in Italy and Australia for a few years.

The Hiltons married in 1998 and Ryan Hilton moved to Sarasota, where they have since taken on different roles growing the travel agency. Malaka Hilton is the Egypt expert, while Ryan Hilton is the safari guru. Ryan Hilton's next big trip is leading a gorilla-tracking event in Rwanda, to sites where the movie Gorillas in the Mist was filmed; the first 20 spots on the trip sold out, so the agency added a second trip. Both Hiltons travel about 100 days a year.

The agency is poised for more growth. In addition to seeking more independent travel agents, Malaka Hilton says she and her husband are considering opening an office in England to promote more European trips. And they plan to keep adding new and exclusive travel packages.

"We love what we do," she says. "We love being able to travel the world."

REVIEW SUMMARY

Business. Admiral Travel Gallery, Sarasota

Industry. Tourism

Key. The travel agency reinvented itself in a declining market by creating exclusive trips.