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Pandemic drives carlson family out of the business where they made a fortune.

The pandemic has pushed the billionaire Carlson family, one of the wealthiest in Minnesota, out of the business where they made their fortune.

Carlson Travel Inc. and 37 related companies tumbled into bankruptcy last month after they were no longer able to withstand the worldwide collapse of corporate travel caused by efforts to slow the spread of coronavirus.

As the firms restructured $1.6 billion in debt, members of the founding family traded their ownership interest in the firms for debt forgiveness.

"The companies are now owned by a group of financial institutions and bondholders," Julian Walker, a Carlson Travel spokesman said. The family members "have no skin in the game."

The outcome is another major turning point for the Carlson family, now led by Marilyn Carlson Nelson and Barbara Carlson Gage, daughters of Curt Carlson, who started the Gold Bond Stamp Co. in 1938 and then the Carlson hotel and travel companies in the 1960s.

Carlson Cos., with its then-portfolio of 1,400 hotels, was sold in 2016 to the Chinese conglomerate HNA Tourism Group. With the exit now from the travel entities, the family's assets are chiefly in other investments.

The restructuring does not involve Carlson Private Capital Partners, the family's private equity firm in Minnetonka.

Carlson Travel will maintain its headquarters at the company's campus at the intersection of Interstate 394 and Interstate 494 in Minnetonka.

The company, which makes money by booking business trips and meeting and event planning, said in court filings that it does not expect its business to return to pre-pandemic levels in the next three years.

"Though the COVID-19 pandemic adversely affected many industries, few industries were as radically affected as the travel industry," Carlson Travel CEO Michelle Frymire said in an affidavit filed in bankruptcy court. "Corporate travel and in-person events and conferences came to an abrupt halt nearly overnight."

Carlson Travel expects to lose $15 million on revenue of $701 million next year, a substantial downturn from 2019, when Carlson Travel earned $239 million on $1.5 billion in revenue, court records show.

In the United States, business travel revenue in 2021 is projected to remain more than $59 billion below 2019 revenues, according to a recent report from the American Hotel & Lodging Association, a trade group. In 2020, business travel fell $49 billion. Hotels have shed nearly 500,000 jobs in the last two years, according to the trade group.

Minnesota has seen one of the steepest declines, with business travel revenue expected to be 72% lower this year than it was in 2019. Only eight other states will see bigger drops, with Massachusetts leading the way at 85%.

The primary business of Carlson Travel is CWT, formerly Carlson Wagonlit Travel, a global travel services company that employs more than 12,000 people in 45 countries. In 2019, CWT was a leader in corporate travel, booking thousands of business trips daily for government agencies, corporate giants and small- and mid-sized businesses around the world.

On an average day before COVID-19, CWT managed about 100 meetings and events, communicated to 70,000 travelers and facilitated more than 240,000 transactions, bankruptcy records show. The company processed more than $23 billion in hotel bookings, airplane flights, car rentals and other corporate travel expenses in 2019.

When the pandemic hit and travel collapsed, Carlson Travel executives sought to reorganize the company's finances, bankruptcy records show.

The company slashed costs through furloughs and pay cuts in 33 countries, saving $500 million. Altogether, the company temporarily eliminated about 5,000 jobs. It also renegotiated key contracts and leases, suspended capital-intensive projects and curtailed nearly all incentive compensation programs. Those changes permanently reduced operating costs by about $300 million a year, records show.

This May, the company hired investment banker Houlihan Lokey to contact 50 potential buyers and gauge their interest in buying some or all of Carlson Travel's assets.

Those talks ended after just one bidder emerged with an informal offer that failed to gain the support of Carlson's bondholders. In a liquidation analysis filed in court, Carlson Travel and its affiliates were valued at $1.1 billion, but creditors were unlikely to get back more than $202 million in a sale, records show.

The company also obtained $125 million in new equity from its owners and borrowed $260 million. Executives thought those moves would be enough. But then, as travel started to recover this year, COVID-19 cases rose again.

"In the United States, where recovery was initially perceived to be strong, the recent surge in the Delta variant and nationwide delays in 'return to office' initiatives injected significant uncertainty'' into the domestic travel recovery, Frymire said in the affidavit.

The company sought Chapter 11 protection last month with a prepackaged reorganization plan, one that had approval from owners and lenders. The plan will eliminate about half of the company's $1.6 billion in debt and provide $350 million in new equity capital. Carlson Travel plans to spend a portion of that on a new technology platform.

The company asked the court to approve the plan 18 hours after filing the case in Texas, noting that a delay of just a few days could mean the loss of customers and revenue.

However, the U.S. Trustee in Texas asked for a delay, saying the company's "breakneck schedule" made it impossible for creditors to evaluate and react to 38 bankruptcy cases.

Despite the protest, a Texas bankruptcy judge approved Carlson's plan the same day the trustee filed its complaint without commenting on the objection.

"We are pleased to have received prompt court approval of the agreement we reached with CWT's financial stakeholders, which positions the company for long-term success and provides significant financial resources to further grow and develop our business," Frymire said in a statement.

Carlson Travel asked the bankruptcy judge last week for permission to hire an investment banker to evaluate potential bids for the company. But that filing was made in order to pay the firm for an aborted sales effort earlier this year.

"We are not up for sale," Walker said.

Jeffrey Meitrodt is an investigative reporter for the Star Tribune who specializes in stories involving the collision of business and government regulation. 

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Amex GBT Agrees to Acquire Carlson Wagonlit Travel for $570 Million

Photo: Amex GBT 

American Express Global Business Travel (Amex GBT) is acquiring corporate travel agency Carlson Wagonlit Travel (CWT), for $570 million, marking a new chapter for one of the industry’s longtime corporate giants.

The deal is expected to close sometime in the second half of 2024. The transaction will be funded by a combination of stock and cash.

CWT, which says it serves 4,000 global customers, has been undergoing major changes in recent years, including taking on new equity owners in 2021. As recently as November, CWT underwent some balance sheet recapitalization aimed at deleveraging its balance sheet and strengthening its financial position. At that time, CWT said it had a “strong financial foundation and capital structure.”

In Monday’s announcement, CWT said that moving under Amex GBT will help its long-term vision and that it was “confident” in the future of the company.

“Joining forces with Amex GBT helps accelerate our vision of a tech-enabled future for business travel, where people and technology combine to deliver an exceptional customer experience. We are highly confident in the value creation of the combined company,” CWT CEO Patrick Andersen said.

It also said that, when the deal closes, its clients would have access to Amex GBT’s proprietary software, including programs like Neo1, Neo, and Egencia, and Amex GBT’s professional services.

TMR reached out to CWT to ask about the evolution of the CWT brand when the company does move under Amex GBT, and whether or not the CWT will remain. A spokesperson told TMR that "it’s very early in the process to discuss CWT as a brand. We are all proud of the name we have built in the marketplace and our ancestry. Today, we remain CWT."

Amex GBT’s CEO Paul Abbot said on Monday that bringing CWT under the Amex banner will “create more choice for customers, more opportunities for people, and more value for shareholders.”

CWT traces its roots back to 1872 when a Belgian innovator Georges Nagelmackers, who went on to create the Orient Express, founded Wagons-Lits, which means "sleeping cars."

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CWT is the New Name in Digital Business Travel, Hotel Distribution, and Meetings & Events

February 18, 2019

Minneapolis, 18 February 2019: CWT has been unveiled today as the new official name of Carlson Wagonlit Travel, the global travel management company.

The three-letter classification combines honoring the company’s heritage and its digital leadership ambitions, as well as reflecting the three pillars of its focused value proposition: simplifying corporate travel, connecting to unlock possibilities, and collaborating with businesses. It also connects with the three-fold intent to be the undisputed global leader in digital business travel, hotel distribution and meetings and events.

“This identity change is the latest phase in our digital development plan to combine the power of technology and innovation with the expert know-how of our people,” said CWT’s President and CEO Kurt Ekert. “There’s a romantic link with the Wagons-Lit era, and we are justifiably proud of our 150 year-heritage – however, today’s developments reinforce our intention to continue to lead our industry for the next century and a half.”

Three of CWT’s four specialist services, CWT Energy Resources & Marine, CWT Meetings & Events, and CWT Solutions Group will also benefit from the rebrand with new logos, while clients of the global hotel distribution division, RoomIt by CWT, will only see minor changes in the color palette.

CWT Promises

Having spoken with our clients, suppliers, and employees across the globe, we’ve identified new opportunities to offer our client’s employees the choice and support they need to be empowered and engaged. And we’ve brought these insights together into three core brand promises that will guide us going forward:

• Simply better travel

Offering a simple and seamless travel management experience - from an intuitive user interface to integrated management tools.

• Unlocking possibilities

Providing more services and content to travelers, travel managers and suppliers - to unlock people potential and business possibility.

• Moving forward, together

Innovating and evolving our offering - using new technologies to provide our clients with new and better ways to manage global corporate travel

Companies and governments rely on us to keep their people connected. We provide their travelers with a consumer-grade travel experience, combining innovative technology with our vast experience. Every day, we look after enough travelers to fill more than 260 Boeing 787s and 100,000 hotel rooms - and handle 105 events. We operate in around 150 countries, and in 2017 posted a total transaction volume of more than US$ 23 billion.

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Carlson Wagonlit Travel Rebrands as CWT

Categories: News Travel Management Companies

Tags: CWT Carlson Wagonlit Travel

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Carlson Wagonlit Travel Rebrands to Sound Cooler

Andrew Sheivachman, Skift

February 21st, 2019 at 2:00 AM EST

Now we've got Amex GBT, BCD, and CWT: an alphabet soup worthy of a sector that relies on bromides and buzzwords over substance.

The last few years in corporate travel have been replete with travel management companies that have nominally been focused on service claiming to shift towards a technology-first strategy.

Carlson Wagonlit Travel , one of the biggest travel management companies in the world, has changed its name to CWT to move away from its roots toward a digital future. Many already called the company CWT for short, and its divisions like CWT Meetings & Events and CWT Solutions Group have used the CWT tag for years.

Carlson Wagonlit Travel was founded in 1994 in a partnership between Carlson and France’s Wagonlit Travel, which was owned by Accor. Accor sold off its share in the company in 2006.

“This identity change is the latest phase in our digital development plan to combine the power of technology and innovation with the expert know-how of our people,” said CWT president and CEO Kurt Ekert in a statement. “There’s a romantic link with the Wagons-Lit era, and we are justifiably proud of our 150 year-heritage – however, today’s developments reinforce our intention to continue to lead our industry for the next century and a half.”

CWT still doesn’t own CWT.com, though.

It’s interesting that the statement doesn’t mention the erosion of the Carlson brand in the global travel marketplace.

Earlier this decade, Carlson Hotels represented one of the world’s biggest hotel chains. After acquiring a majority stake in Rezidor in 2010, Carlson Hotels  sold off its combined holdings in the hotel sector to HNA Group in 2016. HNA Group turned around and sold off the Carlson assets to Jin Jiang International Holdings last year, which had been renamed as Radisson Hotel Group , in an effort to ease its massive debt load.

So while there are still Carlson hotels out there, the brand likely has limited value moving forward. Carlson, though, has fully owned CWT since 2014.

No corporate rebranding would be complete without a video featuring buzzwords flashed on screen accompanied by a generic minute of corporate-speak from Ekert, of course.

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Tags: carlson wagonlit travel , corporate travel , ctir , cwt

Photo credit: A promotional image detailing the evolution of the Carlson Wagonlit Travel brand over time, culminating with a hoverboard riding tech bro. Carlson Wagonlit Travel

While we’re still a relatively new company in name, our history stretches far beyond 2008. We can trace our roots back to Ask Mr. Foster Travel, a franchise brand dating back to 1888, which evolved into Carlson Wagonlit, then Travel Leaders Group. In 2020, we became Internova Travel Group.

Proud Lineage, Strong Future

Established in 2008, Internova Travel Group delivers a high-touch, personal level of travel expertise to leisure, luxury and corporate clients through our more than 6,000 company-owned, franchised and affiliated travel agencies throughout the United States, Canada, the United Kingdom, Mexico and a presence in more than 80 countries.

Today, Internova Travel Group represents more than 100,000 travel advisors worldwide and ranks as one of the industry’s largest travel services companies. Headquartered in New York City and active around the globe, our extensive network can assist travelers all around the world. Our team of leaders — from our expert travel advisors to our executives — are dedicated to delivering the best travel experiences.

In January 2008, Travel Acquisitions Group (TAG), led by Michael Batt, was created through a management-led buyout of Carlson Leisure Group from Minneapolis-based Carlson Companies. In March of that year, TAG acquired TraveLeaders, which is later renamed Travel Leaders Franchise Group. In August, TAG merged with luxury travel agency company Tzell Travel Group. Tzell’s Barry Liben becomes the first CEO.

TAG announced the creation of Travel Leaders Corporate, a new business travel division, in February 2009. That May, TAG officially changed its name to Travel Leaders Group. Later in August, Travel Leaders Group acquired Nexion Travel Group, a leading North American host agency for home-based travel agents, from Sabre Holdings. Travel Leaders Group announced the acquisition of Vacation.com — North America’s largest vacation and cruise selling network — from Amadeus Americas, Inc. in December 2009.

In October 2012, Travel Leaders Group launched Agent Profiler to connect travelers to ideal travel advisors via TravelLeaders.com. Protravel International became part of Travel Leaders Group in November 2012. The following year, Travel Leaders Group unveiled its new luxury hotel program, SELECT Hotels & Resorts, in May 2013.

Ninan Chacko, CTC, became CEO of Travel Leaders Group in 2016. That August, Travel Leaders Network was formed through the combination of Vacation.com, Results! Travel and Travel Leaders Franchise Group.

In January 2017, Travel Leaders Network officially launched in Canada and Travel Leaders Group acquired Andrew Harper, a boutique luxury travel agency brand. Travel Leaders Group also acquired Colletts Travel Limited, a luxury travel agency brand based in the United Kingdom. In May 2017, Travel Leaders Group acquired Corporate Travel Services of Mexico and launched a game-changing website and influential travel brand Vacation. Travel Leaders Group merged with industry powerhouse ALTOUR in July and added Travel Management Partners to its corporate portfolio in September 2017.

Travel Leaders Group declared 2018 “The Year of the Travel Agent” and acquired Barrhead Travel Group, one of the largest retail travel companies in the United Kingdom, that February. Innovative business travel hub, View from 36K, launched in August. By the end of the year, the new corporate headquarters opened at 1633 Broadway and served as the headquarters of Travel Leaders Group, Travel Leaders Corporate, Protravel International and Tzell Travel Group.

In January 2019, Travel Leaders Group acquired YES (Your Event Solutions).

In January 2020, J.D. O’Hara became CEO of Travel Leaders Group. In May 2020, Travel Leaders Group rebranded as Internova Travel Group. 

Internova Travel Group continues its rise in the travel industry, acquiring new brands, attracting new advisors and partners, creating new, innovative programs — all to empower the world to travel. 

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