New York - March 25, 2008
Vacation Agent Magazine
by David Cogswell

Isram’s world of people

ACQUISITIONS, EXPANSION AND A STEADY VISION SPELL SUCCESS FOR THIS OPERATOR

Isram World of Travel was founded in 1967 as a retail operation by American-based Israeli trade unionists with the purpose of forging a link between American Jews and Israel. It began as a single-destination operation, concerned only with travel to Israel. Two years later, it shifted to a wholesale business model selling through travel agents, a policy it has continued until today.
Ady Gelber, Isram’s executive chairman and CEO, joined the company as president in 1979 after a seven-year stint working at Israeli airline El Al in St. Louis, where he served as the district sales manager for the Bible Belt.
Gelber began his career in the travel industry in Israel in 1960 as a ticketing agent with El Al. Later, he worked as an airport traffic manager for Alitalia in Israel. And when El Al offered him a job in the U.S., he took off for America.

EXPANDING ITS GLOBAL REACH
When Gelber joined Isram, 90 percent of its business was travel to Israel, with 10 percent coming from extensions to Greece on Israel packages. Gelber took it upon himself to expand and diversify the company. He began with an internal growth plan, expanding Isram’s programs throughout the Middle East, Mediterranean region and Eastern Europe. Then he turned to expansion by acquisition.
“I did the same thing Far & Wide did,” he says with an ironic chuckle, since the Far & Wide collapse is the tour industry’s classic example of what not to do. “Only I did it more carefully. I expanded by purchasing assets, and in our business the assets are the people working in other companies.”
Isram’s first acquisition was Orient Flexi-Pax, a 20-year-old operator of travel to China and the Orient. Isram first purchased 50 percent of Orient Flexi-Pax in the early 1980s, and after two years purchased the remaining half. The acquisition expanded Isram’s base from the Middle East to the Far East. Then in the early 1990s, Isram purchased Latour, a provider of packages to Latin America. The sale gave Isram a base on yet another continent, plus a new destination ripe for growth within the U.S. market.
The company also bought out Escapade Vacations in the early 1990s, giving it the expertise and infrastructure to conduct travel to Spain, Portugal and Morocco. In addition, Isram operates the AIMS Travel brand, which provides tours and cruises especially designed for doctors and their families by the Academy for International Medical Study, and Jewish Heritage Tours, offering programs to Jewish clients searching for their genealogical roots in Eastern Europe, Africa, Asia, the Mediterranean and Latin America. Jewish Heritage Travel is run by the operations team that implemented travel programs for the American Jewish Congress for the past 26 years.

DESTINATION KNOWLEDGE
Isram’s expansion method is based on the destination expertise required to operate effectively in each region. “It’s not just that Isram started to sell Latin America or Eastern Europe,” says Gelber. “In every region we have destination experts, unlike in some companies where the same person does Israel, Latin America and China. When agents call us, they are talking to an expert of the destination.”
Expanding its destination product line has given the company a healthy diversity, enabling it to withstand the economic shocks that may occur from time to time in any specific destination as a result of political, economic or natural forces. By investing in human capital (people with years of experience and destination expertise), Isram has built a strong base that has proven itself to be resilient and adaptable for more than 40 years in an increasingly fluid and volatile global marketplace.
In return for bringing them clients, Isram shares its in-house destination expertise with agents. “In today’s world with the Internet, sometimes consumers know more about where they want to go and what they want to see than their travel agent,” says Gelber. “How much can you know worldwide? So the travel agent puts the client on the phone with us, and that’s where the expertise of my people comes into play.” Today, Isram operates its travel packages and services to 56 countries on six continents. It has 60 employees in its New York office, 132 worldwide.
In December 2006, Gelber, who was a minority shareholder, purchased a majority share and became executive chairman. Gelber says he has no current plans to expand Isram’s destination roster. “In destinations, we are where we need to be, but we are expanding our product line,” he says. “For example, this year we introduced a Spanish-speaking tour to Israel. We already
offered FITs and groups in Spanish, but this is the first printed tour in Spanish this year.”

LAUNCHING AN OFFSHOOT
Isram is also opening a new division called Elite Customized Tours and Travel. The company introduced the Elite series in some of its brochures in 2007. This year it will expand to a
full-fledged division of the company.
Isram’s initial Elite Series is an India program, a 12-night tour including Delhi, Agra, Jaipur, Udaipur and Jodphur. The program incorporates top-end luxury accommodations, such as the Imperial in Delhi; the Oberoi Amarvilas in Agra, where each room has a view of the Taj Mahal; and the Oberoi Udaivilas in Udaipur. The package uses business-class air between several cities on the itinerary, and it includes private visits not available to the general public.
The product model of the series is an independent, luxury, custom experience, with support and pampering at every step, with no unwelcome intrusions on the traveler’s independence. Although the program comes with an itinerary, it is, as Gelber puts it, “only a suggestion.” The client is in total command, and everything on the trip is “changeable and can be reorganized on a daily basis as the trip progresses.”
The company’s initial efforts in the upscale market have paid off. “It’s only the beginning of it,” Gelber says. “Eventually, we’ll have Elite product to all destinations. We have it customized, but for now the Elite Tour series is Eastern Europe, Vietnam, China, Peru, Israel and Egypt.” Also upcoming are programs for Russia and Cambodia. The new series is a hit with agents, too. The average agent commission for an Elite Series booking is $1,100.

FAMILY MARKET
Isram is expanding its appeal to the family travel market with a new Family Fun series of programs for Singapore and Hong Kong, Thailand and China, and a “Family Discovery” tour that visits the music history capitals of Vienna, Prague, Budapest and Salzburg, Austria. More family programs are in preparation.
The weakness of the dollar against the euro has little effect on Isram. “We’re not in Western Europe,” he says. “We’re in Central and Eastern Europe, and in Spain and Portugal.” In fact, Gelber says, 2007 was one of its best years in all its destinations. “Israel had a banner year in 2007,” he says. “So did Egypt. So far in 2008, the trend continues.”
Latin America is still growing, Gelber says. Asia, however, is not growing quite as much. “Indochina and North Vietnam are still very much in demand, but in China we’re seeing a bit of a slowdown,” he says.

PHILANTHROPY AND COMMUNITY
In keeping with the changing times and evolving concerns of its customers, Isram is also expanding its participation in charitable activities. In December 2007, IsramWorld announced it would make a contribution to Doctors Without Borders, an independent international humanitarian organization that provides urgent medical care in more than 70 countries worldwide.
Isram is a people-oriented business, with its capital based on the expertise of its destination team, and its relationship with agents and their clients. Isram’s business model doesn’t include direct sales to customers. It works strictly through agents.
According to Gelber, the company’s ultimate pledge to agents is, “We will always bring you back a happy client.”
When Gelber joined Isram, it was an $11 million company. In 2007, the company earned $75 million, though it’s still seeking to build back up to its pre-9/11 levels of $100 million. As a company that started as a retailer, Isram’s fundamental understanding of the retail business and its affinity with retailers is the driving engine behind its business.
As a wholesaler with close partnerships with the retail community, it values the agent-client relationship as much as it values its own relationship with agents. As a company with a strong service ethic, Isram places client satisfaction as its constant and ultimate goal. While Isram constantly hones and builds its expertise of its ever-changing destinations, it relies on its agent partners to similarly maintain their knowledge of their respective client bases. “I believe that the most important thing for the agent is to know his or her client,” says Gelber.

for more information
800-223-7460 | www.isram.com

“WE WILL ALWAYS BRING YOU BACK A HAPPY CLIENT.” — ADY GELBER