Have sum, will travel.

• Author: Nelson, Luann
• Position: First Travelcorp - Includes related article on Glenn Wilcox - Company Profile

The travel business is stalled, but with the right connections, these guys could be going places.

If timing is everything, the founders of Raleigh-based First Travelcorp must be using a different calendar from most folks. What with war and recession, the recent past has been cruel to travel agencies. Record numbers have failed, and of those surviving, only 10% turned a profit last year, according to some industry estimates.

But none of that fazed Garland Tucker III, Fred Coward III and Peter Swenson. After starting their company in June, they acquired Greensboro-based Lucas Travel in August; Raleigh-based Patterson Travel in September; and Durham-based McDonald Travel in October -- creating what they say is the largest privately held travel agency in the state, with revenues in the $50 million range. (The non-profit Carolina Motor Club's AAA Travel Agency had 1990 revenues of $56 million.)

The partners won't say what they paid for the agencies, but observers speculate it would be $4.5 million to $5 million. The money came from a combination of seller financing and funds from 20-plus investors. NationsBank has provided a line of credit.

First Travelcorp's founders have seen their share of corporate turmoil. Tucker and Coward were president and executive vice president of the now-defunct Carolina Securities of Raleigh. Swenson was a staff vice president at Piedmont Airlines.

For many travel-industry veterans, the big question is why these highfliers would choose a business with such narrow profit margins -- some say about 1% of sales.

"There is no experience working for a major corporation, with all its support systems and bureaucracies and corporate structures, |that can~ fully prepare you to assume ownership and control of a small business," says Harold Panel, a former Eastern Airlines sales manager who now owns Capitol Travel in Raleigh. "You don't learn until you get your hands on it."

With its three acquisitions, First Travelcorp has 75 employees in seven offices. It's nowhere near finished. The goal, Coward says, is to have offices throughout the Southeast. "All we can tell anybody is we want to grow the company as rapidly as we can in an orderly and profitable fashion," he says. "We are absolutely growth-oriented."

Those are bold words in these times. But experience in the brokerage industry is great preparation for the travel business, Coward, 53, says. "Brokers act as agents, selling somebody else's inventory or stock. That's what a travel agent really does. ... Most of the business activity is done by telephone. It's a service industry. To have a lot of size, you have to have a lot of branches."

But times are hard for even the most-experienced travel agents. Travel agents' airline ticket sales were off by 4%, according to Washington-based Airlines Reporting Corp., which processes such sales. At the end of November, agents' sales had reached $44.4 billion, compared with $45.8 billion a year earlier. The 1990 year-end figure was $49.5 billion. And, of course, fewer tickets mean smaller commissions for agents.

War and recession are driving agencies out of business in record numbers. ARC reports a big jump in "voluntary deletions," or agencies withdrawing from its system -- which probably means the companies closed their doors: 1,823 as of Nov. 30, compared with 1,250 through Nov. 30, 1990. In all of 1988, there were only 793 such withdrawals. There was also a big increase in defaults by ARC member agencies: 665 during the first 11 months of 1991, compared with 478 for the same period in 1990.

But in Tucker, Coward and Swenson's view, all this is just darkness before the dawn. They see travel as a consolidating industry in which the advantages of size -- economies of scale in back-office operations and purchasing power to buy sophisticated computer equipment, for example -- more than make up for the difficulty of maintaining the personal service. "We have more negotiating...