Pro Travel Network Brings Business to Nevada
Domiciling in Nevada is good for both the company and the State
Pro Travel Network, Inc. (PTN) calls Nevada its corporate home, a decision that a growing number of companies across North America are making, thanks to Nevada's business-friendly corporate regulations, tax structures and securities law. |
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PTN is an internet provider of online travel stores for travel agencies and home-based representatives using proprietary services and technology. Close to 60% of leisure travel is now booked by home-based travel agents, and PTN is one of the leaders in setting up these independent travel agencies. PTN currently supports some 7,000 independent travel agents and representatives.
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"We put people in the travel business," said PTN CEO & Founder Paul Henderson. "Our network of agents use their status to book both business and leisure travel for themselves, their family and friends, or they can run a full-fledged travel agency from home, serving both retail and online customers around the globe, and turn it into a major or even primary source of income."
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PTN doesn't operate its own travel booking site – it doesn't compete with its representatives. Instead, it supplies the tools that enable these independent agents to operate their own branded site comparable in functionality to well-known sites like Expedia, Travelocity and Orbitz. PTN also provides extensive training programs and marketing tools to help agents operate and grow their business.
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PTN incorporated originally in Nevada on October 23, 2003. "In addition to the better-known benefits of low fees and taxes," said Henderson, "when we did our homework, we felt that Nevada was the best state to support our long-term strategy for creating shareholder value."
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In 2005, PTN engaged Public Company Management Corporation (PCMC), also a Nevada Corporation, to help them lay out that strategy and prepare their company operationally for that process. PCMC's team of professionals began working with PTN to help them better understand and implement best practices for accounting and financial processes and corporate governance that are required of small business issuers.
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PTN has been growing their business model, reporting revenues of $2.6 million for fiscal year ending June 30, 2006, an increase of 57% over the previous year, and gross profit of $1.1 million, a 66% increase over the previous year. They are not only profitable, butfree of long-term debt. So if Nevada's filing fees and taxes are so low, how does a company like PTN domiciling in Nevada help the state?
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First of all, with Nevada becoming one of the top destinations for incorporation in the U.S., the volume adds up. According to the Nevada Resident Agent Association, 80% of Nevada’s new business filings come from outside of Nevada, which accounts for approximately $100 million of general fund revenue. As more and more companies become aware of the advantages of incorporating in Nevada, that number should only grow.
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The second reason is perhaps less obvious, but more powerful in the long run. Many of these businesses, such as PTN, bring with them innovative business models that support Nevada economic development.
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For example, people who are frequent tourists to Nevada can typically save on their net travel expenses by becoming a PTN travel agent, cutting out the middleman, booking directly with suppliers and earning the commissions for their own travel.
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PTN's model is also intended to reduce costs to suppliers by providing agents direct access to supplier reservation systems when possible rather than going through one of the major Global Distribution Systems (GDS). According to Global Travel Exchange, "At the supplier level, distribution costs are amongst the highest expenditure items for airlines, hotels, cruises and car rental companies. To reduce costs and maintain control of their own commercial destiny, suppliers are trying to bypass the GDS to sell direct to institutional buyers and selected agencies." Forrester Research estimates that integrated direct links would increase the profitability of a typical supplier by 10% as it diverts a third of its sales away from GDS's and directly to buyers.
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"The suppliers love what we're doing and have been very supportive in providing us direct access to their systems," said Henderson.
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PTN's model benefits the Nevada tourism industry by reducing costs to both suppliers and consumers. It is exactly the kind of company that the PCMC Nevada Development Advisory Board hopes to identify and develop within the state and attract from out-of-state: small business issuers (annual revenue of $2 to $25 million) that operate in established markets, high growth potential niche markets and/or market segments that are differentiated, driven by pricing power or mass scale standardized product/service delivery. Companies that bring far more value to the state than just filing fees.
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"I couldn't be happier with Nevada as our corporate home," said Henderson. "It's a win-win proposition, and those are the best kind.”
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Receive a free copy of the white paper, “The Nevada Advantage ” – a $129.99 value – by visiting http://www.pubcowhitepapers.com/NBJ.
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