Local Travel Pioneer Helped Put Hawaii on Vacation Map

When he founded his first travel agency in 1959, Ed Hogan knew the market for Hawaiian vacations could be big, but he faced a serious obstacle.

Hawaii, which was just becoming a state, seemed an exotic, even scary destination for many people. How do you make such a trip seem safe to even the most cautious homebody?

“You have the chamber of commerce sponsor it,” said Hogan, smiling at the simplicity of the solution.

In a style he likens to the fast-talking traveling salesman in the “The Music Man,” Hogan went from town to town, chamber of commerce to Moose Lodge to farm bureau, offering to throw in a couple of free trips to Hawaii for each group that lent its name to a tour package.

The strategy not only helped sell tickets, it also helped build interest in Hawaii because the groups would typically raffle off the free tickets as a fund-raiser.

The “Travel King” was on his way.

Hogan has built Pleasant Holidays--a business he started with $10,000--into a wholesale travel behemoth that generates more than $400 million in sales annually.

The Westlake Village company has 1,700 employees, owns four hotels and controls a dozen subsidiaries, including Pleasant Mexico Holidays, Japan & Orient Tours, Westlake Travel Service and, of course, the crown jewel, Pleasant Hawaiian Holidays.

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The founder, chairman and chief executive has made a fortune selling affordable travel packages, and along the way he’s introduced 5 million Americans to luaus, roast pig and the hula.

“Travel and tourism is the greatest peacetime economic engine the world has ever known,” said Hogan, who loves to spout anecdotes that he calls “Hoganisms” and is known for wearing Hawaiian shirts.

With a mansion in the gated Westlake Island development loaded with priceless paintings and sculpture, and a 17,000-square-foot French chateau under construction in Lake Sherwood, the 72-year-old businessman is living proof that travel is indeed an economic engine.

Although Pleasant Holidays hit a bumpy patch during the recession in the early 1990s, sales in recent years have grown at a 10% annual rate. Sales were $405 million in 1999, and the number is expected to hit an all-time high of $450 million this year.

Hogan built a $5-million, 30,000-square-foot reservation center in Bakersfield in 1998, doubling to 280 the number of reservation specialists. The company, meanwhile, is making a push into the Midwest and East by hiring American Trans Air to provide two flights a week to Pleasant Holidays customers out of Chicago and New York.

The company already provides customers with a total of 26 flights a week from Los Angeles and San Francisco through Trans Air during its summer peak. And the new flights will guarantee the company airline seats in an increasingly competitive market for flights, said Ken Phillips, a company spokesman.

“It’s going to cost us $35 million a year whether we book passengers or not, but were willing to take the risk to keep the product growing,” Phillips said.

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One of nine children born to Irish immigrants, Hogan grew up during the Great Depression and had to wear clothes handed down by a classmate’s family.

“I didn’t know I was poor, so I wasn’t resentful about it,” he said.

After serving in the Naval Air Corps near the end of World War II, Hogan went to work as a co-pilot for Sky Coach, shuttling passengers between Burbank and Oakland. He later joined Transocean Air Lines, a nonscheduled airline that became the first tourist flight operation to Hawaii, as a sales manager and later director of domestic and Pacific sales.

Hogan said he had the greatest motivation in the world to start his own retail travel agency, Pleasant Travel Service, in 1959. Transocean Air Lines was going out of business, and Hogan faced losing his job.

He and his wife, Lynn, scraped together their savings and started putting together travel packages for community service groups. The company took its name from Point Pleasant, N.J., where it started, but the company moved to Panorama City in 1962 to go after the budding Hawaiian market.

The Hogans demonstrated a knack for putting together economical travel deals, and the company went from travel retailer to travel wholesaler as other travel agencies starting turning to them for travel packages.

The company is now the biggest wholesaler of Hawaiian vacations in the country. And in recent years, it has added vacations to Mexico, Tahiti and the South Pacific, Asia and Europe.

About 95% of the company’s business comes from travel agents, and its biggest customers are AAA Travel, American Express Travel, Uniglobe Travel, Carlson Wagonlit Travel and Leisure Travel Group.

The company’s next biggest competitor in the Hawaiian market is San Jose-based Classic Custom Vacations. The Internet, meanwhile, has helped other smaller players make inroads into the market.

But because Pleasant Holidays sends so many customers to Hawaii--450,000 a year--it can demand rates from hotels and airlines that are tough for competitors to beat.

“We don’t play a Big Gorilla role with our partners, but we expect a good price,” Phillips said.

Susan Dushane, president of the Southern California Chapter of the American Society of Travel Agents, said Pleasant Holidays is often associated with discount vacations, but over the years the company has expanded its offerings to include luxury accommodations.

“They have every kind of package, from the affordable to the deluxe,” said Dushane, an agent for Travel by Greta in Northridge.

At the low end, a seven-night vacation to Hawaii costs about $465 per person, including air fare, hotel and a flower lei, which is presented to travelers by Pleasant Holidays employees upon arrival.

On the other end of the scale is the Hapuna Beach Resort, which runs $5,000 a night. Any number of extras are available, including a butler, a masseuse and limousine service.

“Basically, it would be everything you could possibly want,” Phillips said.

The typical customer is college educated, age 35 to 54, married and has an income of $70,000 or more a year.

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Rosa Buettner, vice president of sales for Classic Custom Vacations, sees Pleasant Holidays as a solid competitor but described its vacations as “off the shelf.”

“Our products aren’t prepackaged,” Buettner said. “Each is put together for each customer. Pleasant is more package-oriented, and they don’t have as much flexibility to deviate from that.”

Unlike Classic, Pleasant Holidays offers its customers a free orientation breakfast after they arrive. But Buettner said the breakfast is actually a three-hour sales pitch in which the company tries to sell vacationers other tours and activities.

Phillips disputed that, saying the orientation breakfasts last about an hour and are “informational in nature more than anything else.”

Ada Brown, owner of Seaside Travel House in Long Beach, said her customers have been happy with Pleasant Holidays. The only complaints came from customers who booked economy packages and expected deluxe treatment.

“Sometimes people want to pay bottom dollar, but they expect top-dollar service,” she said.

Looking back on the company’s 41-year history, Hogan attributes his success to the “the three E’s--being effective, efficient and economical.”

“You have to provide a quality product with consistently good service,” he said.

He attributes the company’s recent growth spurt not only to the hot economy--which has boosted Americans’ expendable income--but also to a decision by the airlines to cap the commissions they pay to travel agents to book flights.

Pleasant Holidays pays travel agencies up to 15% commission for booking travel packages, including the flights, so agents have been bringing in more business. This year alone, the company expects to spend more than $40 million on commissions to travel agencies, advertising and promotions.

Despite his age, Hogan is actively involved in the travel business, and he and Lynn are tireless promoters of the industry. Hogan serves on numerous industry boards, including the United States Tour Operators Assn.

In 1998, the couple formed the Hogan Family Foundation Inc. to “promote a greater understanding of the importance of travel and tourism.”

After all expenses including salaries are covered, profits from Pleasant Holidays LLC are funneled into the foundation, which funds the Ed and Lynn Hogan School of Travel and Tourism at Loyola Marymount University in Westchester, as well as an entrepreneurial training program at Gonzaga University in Spokane, Wash.

Christina Hunter, the program director, said the foundation was started with a $100-million endowment from Pleasant Holidays, but she was unable to say how much it receives each year from the limited liability corporation.

Ed and Lynn Hogan no longer take a salary from Pleasant Holidays, but with their personal wealth estimated in the hundreds of millions of dollars, it’s not likely they’ll go wanting.

The Hogan children--Brian, Christine, Gary and Glenn--are all executives at Pleasant Holidays, and the corporation pays their salaries, Phillips said. However, the company essentially has been passed on to the foundation, not Hogan’s heirs, he said.

“The children are fine with that,” Phillips said.

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