Value Added: D.C.’s travel queen talks about building her $1 billion business
By Thomas Heath,
Gloria Bohan is where I would like to be when I reach age 70.
She is the founder and president of a 524-employee travel agency based in Fairfax City, Omega World Travel, which she built with her late husband, Dan.
I’m writing about her because I just passed my 57th birthday, and as I think about a path forward, I was energized by Bohan, her engagement with her surroundings, pride in the company she created and her continued appetite for work.
Bohan sat next to me last week at the Washington Nationals game (my seats), poking her iPhone as she answered e-mails between reminiscences about her childhood in Bay Ridge, Brooklyn, where she developed a romantic fascination with the cruise ships steaming through New York Harbor.
Omega World Travel — which she built through scrappy persistence — is nicely profitable, allowing her a comfortable life in leafy McLean and a place in New York’s Hamptons.
Omega bills more than $1 billion in trips a year and produces revenue in excess of $50 million. The net profit margin is low in the travel agency business, so Omega likely nets in the single-digit millions. Bohan, who has turned down offers to buy the privately held company, would neither confirm nor deny those profit estimates.
The business is not without its challenges. Bohan has had to diversify into new lines of business such as cruises and conferences as her agency fends off online competition from the likes of Orbitz, Expedia and Travelocity. She faces new challenges in mobile technology and government pullbacks.
Bohan, who co-founded a space-travel company called Space Adventures, is one of those people who grew up wanting to get out in the world. For her, that meant leaving Brooklyn for Manhattan, where she saw opportunity. After attending Marymount Manhattan College, she taught high school English.
She got a taste early on for the travel business when she organized her wedding reception, held on a snowy December day in New York aboard the Queen Elizabeth II.
“I did the reception for under $1,000,” Bohan said.
She was bitten by the entrepreneurial bug after she and her husband settled in Dan’s bachelor pad in Washington, where he pondered a post-Air Force career in real estate while taking business courses at George Washington University.
Gloria, meanwhile, had been studying the New York Times Travel section with an eye toward a start-up. While teaching, she spent $300 on a correspondence course from the American Society of Travel Agents in Alexandria.
The company became reality in September 1972. She and Dan had moved to Fredericksburg, where he had taken a job in real estate, and there she formed Omega World Travel.
She launched the business in a 400-square-foot space in an old house in Fredericksburg. She chose the name Omega hoping that the similarly named wristwatch brand would bring some cachet (“Who would want Bohan World Travel? And what if I got a divorce?”).
Bohan started small. She wrote letters to airlines and cruise lines announcing she was setting up an office. She applied to the Airlines Reporting Corp. so she could print and sell plane tickets.
The former teacher started visiting schools, hair salons and doctor’s offices, dropping brochures and business cards. She started selling cruises run by the nascent Carnival Cruise Lines, which formed in 1972 and was sailing out of Norfolk and Miami.
But her first real business traction came from school kids.
“I put together little senior-class trips. I called bus companies and airlines and asked about charter prices and investigated hotel prices. I put together fliers with photos of Mickey Mouse and came up with a three-night trip to Disney World. I could do four [students] in a room for $79, with air.”
Remember, it was the 1970s.
One high school bus tour to Lancaster County, Pa., involving 10 buses carrying the entire school, netted her a cool $3,000.
As she branched out, she learned money-saving tricks like chartering aircraft before 6 a.m., which allowed her to avoid having to pay to have a special plane flown in. One sweet score involved a $30,000 profit when a beverage company asked her to sell them the dates Omega had already reserved for another client on a Mississippi riverboat. She ended up with both commissions.
“One book I read every day was my checkbook.”
She also stayed on top of technology, installing terminals in her offices so she could give physical tickets to customers, allowing them to bypass the airline ticket counters at airports.
“Suddenly, the ability to handle real airline tickets and products gave us another outlet for profitability and growth,” she said. “You could select seats, reserve meals.”
Bohan recruited corporate clients installing offices within companies to handle all their business travel. She started a 24-hour hotline service for her travelers, which brought in modest revenue. More importantly, it added value to her customer base by allowing them to call at any hour seeking assistance. It also increased their reliance on Omega.
She pioneered bidding on official government travel, snaring a piece of a $26 million contract in 1982 from the General Services Administration. That produced a new growth area to mine. Omega’s billing for the federal government’s travel business would eventually top $200 million a year but has since dropped to around $150 million.
By 2000, Omega had more than 120 locations and 1,100 employees. The volume enabled her to command favorable terms from airlines, car-rental companies and hotels — in turn passing along better pricing to customers while she took a share for Omega.
Then the increasing commercial viability of the Internet and the tragedy of Sept. 11 decimated the traditional travel business and forced Omega to retrench.
Today, the company has about 24 full-service retail offices in the United States, London and Japan. It also has partner agencies throughout the world, and about 100 people at its Fairfax headquarters. Although the company has about half the number of employees it boasted at its peak, gross sales have been stable at more than $1 billion.
“Technology has allowed us to do more with less staff, boosting productivity and profits,” Bohan said.
The downside is that technology, in the form of the Internet, put control in the hands of consumers by allowing them to shop online for the best deal. So Bohan has been forced to diversify to stay healthy. One big move was greater emphasis on organizing conferences and meetings, which is a big growth area for the company. Corporate and government travel now make up 70 percent of Omega’s business. About 20 percent is cruises, and the rest is leisure travel and conferences.
She also moved to create Cruise.com, which is now one of the Internet’s largest sellers of online cruises. Customers who take cruises generally go through Omega for their airfare and for hotel and tours before and after the cruise, adding to the company’s profit.
Cruises also are a repeat business, which means less marketing expense to find new customers. The cruise division recently opened a sprawling office in Fort Lauderdale, Fla., which has 80 staffers.
Bohan took one herself, not too long ago. She flew to Barcelona and took a high-end cruise to Venice, where she vacationed a few days.
A million miles from Bay Ridge.
For previous Value Added columns, go to postbusiness.com.