Olivia seeks $1 million in capital campaign

Olivia clients reportedly are rallying to support the popular lesbian travel company financially as it seeks to raise $1 million by April 30.

Customers received a letter in mid-March announcing the launch of the company's capital campaign, which offers a variety of charter membership donation levels ranging from a low of $500 to a high of $10,000. The capital campaign comes amid the worldwide economic downturn and on the heels of a lawsuit by former company executives that settled out of court last November.

Judy Dlugacz, 56, founder and co-owner of San Francisco-based Olivia Companies, resumed the helm of the business with her life partner of 30 years and business cohort, Rachel Wahba, last November.

The Bay Area Reporter obtained a copy of the letter from a longtime Olivia traveler. The woman declined to be identified or interviewed for this article.

The letter, which was signed by Dlugacz, outlined ways in which members could "take action" by becoming a "charter member," planning an Olivia vacation, throwing a house party for Olivia, or donating directly to the company.

Loyal Olivia travelers received the solicitation letter along with the company's 35th anniversary retrospective DVD as a "thank you for being a part of the journey over the past 36 years" and asked members to look toward Olivia's future.

Members only receive the benefits if they travel by April 30, 2010.

Dlugacz declined to say how much money has been raised from the solicitation letter.

Questions raised

Olivia's unusual campaign sparked suspicion about the company's financial stability. A couple of Olivia travelers immediately raised concerns about the impetus of the capital campaign on Olivia Lounge, the company's online member discussion forum, in late March and early April. Members, identified only as Amyjo, a 40-year-old Michigan lesbian, according to her profile; and OliviaTravel36060, which led to a blank member profile, questioned Olivia, a private company, asking for donations as if it were a nonprofit organization. They requested transparency and accountability.

"Last I checked, Olivia is not a charity or not-for-profit organization. Usually when a for-profit company asks for investments of capital, the investor gets an equity stake, a return on investment, and accountability from the company," wrote OliviaTravel36060.

Amyjo agreed, "We should be entitled to more information (like financial reports and net worth of the company) before being asked to contribute to save the company from financial distress."

Amyjo called for disclosure of Olivia's current financial situation, citing the peculiar timing between the company's recent legal settlement as a potential reason for why the business was the "only gay travel company begging former customers to give them some money."

Under terms of the legal settlement, none of the parties are allowed to speak about the lawsuit.

OliviaTravel36060 pointed out that the "economy is a convenient answer right now."
Jeri Umble, Olivia's senior director of customer care, stepped into quell the debate on March 31 offering members an opportunity to speak directly with Dlugacz, but the discussion ensued between Amyjo and gung-ho Olivia supporters.

It does appear that Olivia is the only LGBT vacation company that is currently offering charter memberships. Atlantis Events Inc., which bought rival RSVP Vacations in 2007 and operates both companies, doesn't have a charter membership program, according to Oscar Yuan, vice president of sales and marketing. R Family Vacations also doesn't have such a program, according to Gregg Kaminsky, who co-founded the company with Kelli O'Donnell, the partner of lesbian entertainer Rosie O'Donnell.

Atlantis and RSVP "probably won't explore an option like that," Yuan wrote in an e-mail.

Kaminsky said that R Family Vacations does offer some benefits, such as cocktail receptions, jackets, and other gifts to loyal customers of the six-year-old company, but people "don't have to buy a special membership."

Shannon Wentworth, who used to work at Olivia and went on to start Sweet Cruises, did not respond to a request for comment about her company.

Shoring up

Dlugacz insists that Olivia is financially stable and the charter membership is only to "shore up" 2009's economic crunch. She reiterated in her March e-mail correspondence with the B.A.R. the financial shifts within Olivia outlined in the solicitation letter, such as reducing the company's overhead by 50 percent, renegotiating contracts, and resizing and refocusing destinations for 2010 vacations, among other fiscal adjustments to sustain the company.

"We will weather the economic times; we always have," wrote Dlugacz in a March 30 e-mail. "Every lesbian business and organization needs support right now. ... If our community loses lesbian-owned and -run companies and organizations during this economic downturn, it will take years, if ever, to see them return, and that could be a great loss to our community."

Yet, Olivia still needs help to get to 2010, according to Dlugacz, who wrote that "cruise companies and resorts are also facing cash flow issues" therefore "they require us to pay them long before your vacation takes place." In other words, a member's contribution would be used to pre-pay Olivia's bookings on ships and at resorts.

Atlantis, RSVP, and R Family Vacations aren't experiencing cash flow issues with the cruise lines and resorts they work with, according to Yuan and Kaminsky.

"We have long lasting and strong relationships with both cruise lines and resorts, so we haven't seen a change in the terms with which we deal with them," Yuan stated in an e-mail.

Said Kaminsky, "Resorts haven't requested more money up front to reserve space" for R Family Vacations.

In spite of some Olivia travelers questioning the unconventional campaign, it might not be as unusual as it seems, according to Michelle Burkart, a 30-year business consultant and owner of Think Business based in San Diego.

While the term "capital campaign" is usually associated with nonprofit organizations and refers to raising funds for a new building or significant renovation, in actuality many private companies large and small raise capital in a variety of ways, including exclusives like Olivia's charter membership, Burkart said.

"That's how they raise their revenue," she said. "That exclusivity sometimes drives people to a business. People like to belong to certain things. It makes them feel special."

'Godsend'

Dlugacz knows that clients, many of whom don't live in areas with large LGBT populations, perceive Olivia as a treasured experience for which they save money.

"For some of us, it is our only lifeline to the larger lesbian community. The ability to travel in a safe and open environment is priceless," said Kathy Bartley.

Bartley, 54, said that she and her partner of 15 years, Janice Hallanan, 48, have taken Olivia vacations. The central California couple views Olivia as a "Godsend for people like us" and sent $100 to Olivia out of their vacation fund after returning from Ixtapa, Mexico in January. She said they hope to return next year.

"I just cannot imagine going on vacation any other way ... than on Olivia," Bartley said.

Jana Leal, 50, lives just outside of Denver, Colorado. She said that she and her partner, Catherine (she preferred not to disclose her partner's last name) were considering sending Olivia money from their vacation fund as well. She wasn't sure how much they planned to contribute, but said they were planning a trip in 2010 whether they became charter members or not.

"It's still the best way to travel," said Leal, who said that she and her partner have taken an estimated 15 vacations with Olivia.

Leal, a freelance photographer and former music promoter, told the B.A.R. that she had some experience working with Olivia when she was a music promoter, but she never worked directly with Dlugacz.

Many Olivia customers are responding positively, Dlugacz wrote in the March e-mail.

"Today, alone, dozens of memberships arrived in the mail," she noted.

"Our Olivia family knows that we will always give back to the community, and so they are willing to help us out now," wrote Dlugacz, pointing out that Olivia has donated "millions of dollars in trips to nonprofit organizations over the years."

Some customers agreed.

"They are not just a for-profit company they are a for-lesbians company," Bartley said.