AAA Auto Club Stays Relevant

Posted 12/1/2009

Updated 1 decade ago

Tom O’Brien has shifted AAA South’s focus to cruises, tours and insurance. [Photo: Mark Wemple]

During Tom O’Brien’s 33 years at Tampa-based AAA Auto Club South, including the last seven as CEO, he has seen drastic shifts in two of the club’s core businesses: Travel and insurance. After the 2004 hurricane season, for example, O’Brien spearheaded the creation of the Auto Club Insurance Co. of Florida, which writes homeowners insurance. At the same time, the club has maintained its traditional role of lobbying for better roads and offering maps and emergency roadside services to motorists. Before stepping down as CEO this month, O’Brien, 63, spoke to Florida Trend about keeping the iconic company relevant in changing times.

» Shifting Revenue: “Insurance is getting bigger and travel has gone down because the tour and cruise companies have dropped their prices. We’ll have many months where our travel agents are handling more transactions, but the gross sales are declining. Strategically, insurance has become a very important part of the business. We only write a certain amount of business in the high-risk areas. The more business we can write in the low-risk areas, like Ocala or Sebring, the more we can write in Tampa Bay.”

1976 and Now

Revenue (Travel and Insurance)
1976: $6 million
2009: $600 million ($400 million from insurance)

Members
1976: 230,000
2009: 4.1 million

Coverge Area
1976: Florida’s west coast, excluding Pinellas County
2009: Florida, Georgia, Puerto Rico and parts of Tennessee

Source: AAA Auto Club South

» New Niche: “Ten years ago, 65% of our business was airline tickets, and then the airlines systematically started taking commission away from us. As it pertains to airline, car and hotel — the kind of travel that you can easily do using the internet —?we want to make sure we have a way for our members to use our services, but that’s not an area that we necessarily want to focus on. Now, our focus is really on cruise and tour, on the more affluent traveler. Our niche is not going head-to-head with Travelocity or Expedia.”

» Lobbying: “This year, our big push is going to be on text messaging. Anyone driving a motor vehicle of any kind, it should be against the law to text message.”

» Tampa Bay’s Challenges: “We must address the need for preserving our existing roadway infrastructure and accommodating increased capacity. Public transportation is an important part of the long-term solution, and Atlanta’s MARTA system provides a great example of a system that is both efficient and practical.”