Pleasant Holidays LLC

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Pleasant Holidays LLC

2404 Townsgate Road
Westlake Village, California 91361
U.S.A.
Telephone: (818) 991-3390
Fax: (805) 495-4972
Web site: http://www.pleasantholidays.com

Private Company
Incorporated: 1959 as Pleasant Travel Service
Employees: 710
Sales: $487 million (2002)
NAIC: 561520 Tour Operators

Pleasant Holidays LLC is a Westlake Village, California, company that offers wholesale tour packages to Hawaii, Australia, New Zealand, Mexico, Fiji, Tahiti, the Caribbean, and the Bahamas. Pleasant's tour packages are sold through travel agencies across the United States. In addition to its corporate headquarters, Pleasant maintains offices in Bakersville and San Diego, California, and Honolulu, Hawaii. Founded by Ed and Lynn Hogan, Pleasant is now owned by AAA (American Automobile Association); the Auto Club of Southern California holds a 95 percent interest, while the Auto Club of Northern New England controls a 5 percent stake.

Origins as a Travel Agency in 1959

Pleasant's founders, Ed and Lynn Hogan, met in a Newark, New Jersey, high school in 1943 and were married in 1951. During those intervening years, Ed learned how to fly during a stint in the Navy in the final year of World War II. He then put that training to use, earning a commercial pilot's license and going to work for a small airline called Sky Coach. A natural salesman, loquacious and enthusiastic, Hogan left the cockpit in the early 1950s to take a job with an unscheduled carrier, Transocean Air Lines. He was charged with selling seats on the first tourist flights from California to Hawaii in the days before jetliners, when it took 12 hours for propeller-driven airplanes to fly from the West Coast to the islands.

At Transocean, Hogan learned both the Hawaii area and how to assemble affinity groups. When the company failed, Hogan began to look for a new job but decided to take the advice of a friend and start his own travel agency. While Ed was pioneering the Hawaiian tourist trade, his wife Lynn had earned a degree in graphic arts from Brooklyn's Pratt Art Institute, a highly regarded program at the time. After working for a New Jersey advertising agency, she became a flight attendant for a spell, and following her marriage she found employment at the Walt Disney Studios, doing some work on picture cells for the animated feature Peter Pan. In 1959, when Hawaii became the 50th state, the Hogans used $10,000 in savings to open a small travel agency in Point Pleasant, New Jersey. They decided to call it Pleasant Travel Service. Duties were divided between the couple: Ed sold the trips, and Lynn did the books. In addition, Ed wrote the ad copy, and Lynn provided the graphics and production expertise.

The first few years were difficult for the Hogans, but Ed began to join numerous local organizations, such as the Rotary Club and Chamber of Commerce, and used his charm to drum up business with the people he met. By 1962, Pleasant was able to show a $16,000 profit. Because of Ed Hogan's connections to Hawaii, the company had come to specialize in tours to the islands, and it soon became apparent that New Jersey was not an ideal location for the travel agency's business. It made more sense to relocate to the West Coast, and so in 1962 the Hogans and their four children moved to Panorama City, California, where they ultimately adopted the Pleasant Hawaiian Holidays moniker. As they reestablished the business, the Hogans relied on selling Hawaiian tours packaged by others. Ed attempted to strike deals with some of Hawaii's major hotels but found them reluctant to work with unproven companies. Pleasant's first major break came in 1967 when Ed was able to secure his first hotel wholesaling arrangement with Roy Kelley and his Waikiki hotels: Reef, Reef Towers, and Edgewater. Pleasant was then able to exploit its relationship with Kelley by growing along with his chain—Outrigger, now the largest in the Islands.

Pleasant Moves to Westlake Village in 1974

In 1974, the same year that Pleasant moved its corporate headquarters to Westlake Village, California, Ed Hogan found his attempts to package tours to the outer islands thwarted by hoteliers who remained unconvinced that Pleasant was a worthy partner. Instead, Pleasant bought its own neighbor-island hotel, the $3.5 million Kahana Beach Resort on Maui. According to a 1989 article in Hawaii Business, "The purchase had two consequences. First, he [Ed Hogan] was able to expand his offerings to tourists, many of whom wanted to visit both Waikiki and the Neighbor islands. In addition, his outer-island business gave him stature in the eyes of the major hoteliers who had previously closed their doors to him. 'Once I broke the ice on the outer islands, people began to say, "This guy is not just a flash in the pan,"' says Hogan. Agreements with hotels and other tourists suppliers followed." Another major break in the 1970s was a switch from charters of United DC-8s to four DC-10s provided by Western Air. In the words of Ed Hogan, "That's when we really started moving." Another major factor in the evolution of Pleasant, was its decision to sell travel packages to agents rather than directly to consumers. This travel wholesale approach, according to company materials, "revolutionized the industry and put Pleasant Holidays on the map."

Another major factor in the growth of Pleasant was its relationship to American Express. Starting in 1978, American Express provided ground operations for Pleasant at destination sites (services such as contracting for hotel rooms and rental cars and staffing service desks). American Express had once been a major wholesaler of Hawaiian trips, from 1958 to the early 1970s. When, later in the 1970s, the company decided to augment what remained of its wholesaling business, it turned to ground operations. One of its first clients was Pleasant, which in 1976 was bringing more than 75,000 people a year to Hawaii. Pleasant was an attractive partner for American Express, as outlined by Hawaii Business in a 1986 article: "[Pleasant] was one of the fastest growing tour wholesalers to Hawaii, due to several factors. It was the first to get into packaging tours—bulk buying of hotel rooms and plane seats that allow lower prices for the wholesaler and consumer—in a big way. Hogan also invested heavily in computerization, and initiated the revolutionary marketing tactic of advertising packages directly to the masses instead of just travel agents." Pleasant's marketing savvy and the financial might of American Express "would be a powerful match."

In August 1980, after working together for three years, Pleasant and American Express signed a joint marketing agreement for a five-year term. The ability to use the advertising slogan "Pleasant Hawaiian Holidays with American Express" was of great help to Pleasant in cracking markets east of the Rockies, where the company had little name recognition, a feat accomplished without the expense of opening offices. The agreement called for American Express to receive a share of Pleasant tours booked on the East Coast, whether they were sold through America Express offices or independent travel agents. In addition, American Express shared in upgrades and additions that these customers might make during their stay on the islands. Pleasant, on the other hand, retained all revenues from orders placed west of the Rockies. Over the course of the five-year deal, Pleasant grew at a rapid pace. In 1980, Pleasant brought 100,000 people to the islands, and by 1985 that number mushroomed to 335,000, representing roughly 10 percent of the market. Moreover, Pleasant gained a nationwide presence, opening sales offices around the country and using some of it increased earnings to beef up efforts to computerize its telephone and reservation system. Pleasant was also able to acquire more hotels. In 1981, it bought a 260-room hotel in Waikiki, followed the next year by the purchase of the 514-room Royal Lahaina Resort on Maui. In 1984, Pleasant added two more hotels: a 287-room hotel in Waikiki and the 452-room Kona Hilton Beach & Tennis Resort. The following year, Pleasant acquired the 309-room Sheraton Coconut Beach on Kauai. With a large number of hotel rooms at its disposal, Pleasant held a distinct advantage over many of its competitors. Another factor in Pleasant's growth during this period was the 1980 signing of its first long-term agreement with United Airlines.

When the agreement with American Express expired in 1985, both parties opted not to renew. The break was portrayed as amicable, although philosophical differences between the parties were admitted, and Ed Hogan insisted that only 5.4 percent of Pleasant's business came from American Express. Regardless, Pleasant took over its own Hawaiian ground operations in 1986, as the company continued its expansive ways. In that year, it spent $10 million on advertising and introduced a senior savings program. Also in 1986, Pleasant held the first of what would become an annual event, the Tournament of Centurions. The weekend retreat in Hawaii honored the company's 100 top-selling agents, ranging from small independents to multi-location operations.

In 1987, Pleasant sent its two-millionth customer to Hawaii, and in recognition of his contribution to the islands, Ed Hogan was named "Mr. Tourism Hawaii" by the Hawaii State legislature. Pleasant continued to expand its offerings over the next few years. In 1988, the company added United Express and Delta Connection flights, which brought the number of Mainland departure cities to more than 200. As a result, in 1991 Pleasant reached the three million customer mark in its Hawaii business. The recession of this period hurt but not to any lasting effect, since Pleasant was able to offer an assortment of tour packages that appealed to all sectors of the market. Traditionally aiming for the middle of the market, in the late 1980s Pleasant began to package tours for a more upscale clientele.

Company Perspectives:

Pleasant Holidays—It's not just our name, it's our promise! Since 1959.

Pleasant continued to be dominated by the personality of Ed Hogan, but other family members in addition to his wife and co-founder were also playing key roles with the company as he entered his 60s. Ultimately four children and two in-laws held jobs at Pleasant. Son Brian Hogan, in his mid-30s, succeeded his father as president in 1990. His work experience with Pleasant was typical for the Hogan children. According to a 1992 Los Angeles Business Journal article, Brian "began working for the family business when he was 8 years old by stuffing brochures under the windshield wipers of automobiles. When he was 12, he moved into the office and began filing papers and doing other odd jobs. At 14, he began selling to consumers from behind a counter and at 16 he moved into the transportation department because by then he had a driver's license.… When Brian graduated from high school, he went to work full time at Pleasant Hawaiian, except for [a] goof-off year at age 19. During those years, he has been a mail room clerk, a tour escort in Hawaii, a reservationist, an operations planner, a computer programmer and marketing officer." He may have reached the presidency because of his parentage, but there was no guarantee that his father, who remained chairman of the board, would tolerate substandard performance. Ed Hogan, in fact, fired Brian's younger brother Glenn, although he eventually brought him back to head marketing and planning for Hawaii operations.

During the 1990s, Pleasant continued to nurture its Hawaiian tour business, while looking for new destinations to provide diversification and greater growth opportunities. In 1993, the company launched Pleasant Mexico Holidays. The next year, Pleasant added more than 500,000 seats to its inventory when it struck a deal with American Trans Air. In addition, the company introduced a new online reservations system. Pleasant sent it four-millionth customer to Hawaii in 1996, but the company continued to look beyond its core island business. In 1997, Pleasant acquired Japan & Orient Tours, a company founded in the 1950s, with the hope of eventually doing business in the Pacific, Asia, and Europe. During that same year, Pleasant Tahitian Holidays was launched and a new Web site went live. In addition, the company began to offer Pleasant Concierge Service, catering to upscale travelers interested in booking suites and requesting amenities. At the same time, Pleasant continued to package tours aimed at seniors, families, and couples looking for romantic getaways.

Ownership Change in 1998 Kept Secret

Control of Pleasant changed hands in 1998 when the Auto Club of Southern California bought a controlling interest, but news of the transaction was withheld until June 2001, at which point it caused a bit of a stir in the travel industry. Because of media attention paid to the matter, the California Attorney General's office "looked into" the sale and quickly concluded that there was no law requiring the disclosure of the deal. The office refused to even call its review an investigation or probe, language used in press reports. What made the acquisition so significant to the industry was that the seller was one of Amercia's largest tour operators and the buyer, the Auto Club Southern California, with five million members, was the largest AAA affiliate in the country. Hogan called the sale a strategic alliance that was beneficial to Pleasant, which in 1999 changed its name to Pleasant Holidays, in keeping with the company's diversification beyond Hawaii. He also admitted that he first negotiated with American Express about selling a controlling interest in the business but scuttled the deal because he would have to give up control. The auto club agreed to his terms, eager to find a reliable partner in the consolidating travel industry.

Hogan underwent bypass surgery in 1999, and, as he reached his mid-70s at the beginning of the new century, retained control of Pleasant for only two more years. On the last day of 2001, Hogan sold his remaining interest in the company he had founded with his wife more than 40 years earlier. He stayed on as chairman and remained involved in the business, but his role was more ceremonial than administrative. With the start of 2002, a new president took charge of Pleasant: Tim Irwin, the vice-president of travel for the Automobile Club of Southern California. Irwin quickly made it clear that the way Pleasant operated with independent travel agents would remain unchanged and that the auto club was to receive no special advantages. Given that the auto club provided only a modest amount of business to Pleasant, there was every incentive to continue good relations with travel agencies. Irwin soon oversaw the realization of a long-cherished dream of Ed and Lynn Hogan: serving the Caribbean from the West Coast. In April 2002, Pleasant announced that starting in January 2003 the company would begin to offer packaged tours to Aruba; Grand Cayman, Cayman Islands; Jamaica; Nassau/Paradise Island, Bahamas; Puerto Rico; and St. Lucia. Pleasant's entry into this new market promised to bring an entire new clientele to the Caribbean while adding a major new revenue stream to the company.

Principal Subsidiaries

Hawaii World; Air By Pleasant; Hotels By Pleasant; Pleasant Island Holidays; Pacific Destination Services.

Principal Competitors

Expedia/Classic Custom Vacations; Gogo Travel; Apple Vacations.

Key Dates:

1959:: Ed and Lynn Hogan launch Pleasant Travel Service in Point Pleasant, New Jersey.
1962:: The company moves to Panorama City, California.
1974:: Company headquarters are moved to Westlake Village, California.
1980:: A joint marketing agreement is signed with American Express.
1998:: A controlling interest in the company is sold to the Automobile Club of Southern California.
2001:: The Hogans sell their remaining interest in the company they founded.