The Business Sited in a busy Palm Beach County shopping center, this average-size five-year-old agency derives 39% of its revenues from airline tickets, 48% from cruises, and the rest from hotels, tours, car rentals, and ticket insurance. Travel agencies make money on commissions from bookings; this one made 8% on airline sales in 1992, which is a bit low, but made 14% on typically more profitable cruise sales.

Financial Summary (in thousands)

1990 1991 1992*
Gross revenues $1,793 $1,647 $1,709
Recast earnings before interest, taxes, depreciation, and owner compensation $45 $56 $123 *projected

Price $150,000 (seller financing available)

Outlook The travel-agency biz is still growing, but not the way it was 10 years ago. Airline reservations in particular have declined steadily as a percentage of total sales since the early 1980s. Cruises are prospering, though. Passenger counts have increased by 10% annually for the past 10 years -- good news for this agency, which does three times the cruise business of the average shop. On the other hand, travel agencies are a dime a dozen in Florida (9% of all U.S. agencies are located there), and some say the Palm Beach area in particular may be oversaturated.

Price Rationale The industry rule for price used to be 10% of gross sales, but now it's closer to 6% to 7%, which would project a price of between $103,000 and $120,000 here. But earnings count, too. Taking $88,000 as a weighted average of recast earnings for the past three years and multiplying by 4.5 yields a price of $396,000. If the earnings for 1992 look a bit . . . buoyant, take the weighted average of earnings from 1990 and 1991 ($52,000) to project a price of $234,000, which still makes the asking price, experts say, look damn good.

Pros You'd live in Palm Beach, rubbing elbows with swank society. When that got boring you could fly off to Europe. Or Aruba. Or Australia. And the price of this business, if you can trust the 1992 earnings, is a bargain.

Cons If you can't trust the earnings and you look just at the sales, the price is a tad high. There are few barriers to entry; you could start your own agency from scratch right down the street for, insiders estimate, between $25,000 and $50,000. And just because you move there, that doesn't mean the Trumps (either of them) will have you over for cocktails. -- Christopher Caggiano

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Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Realty Investment Specialists Corp., Boca Raton, Fla., 800-940-5659.