Global Vacation Group Expects Earnings Shortfall.

WASHINGTON--(BUSINESS WIRE)--June 24, 1999--

Board of Directors Authorizes Increase in Stock Repurchase Plan 

Global Vacation Group (NYSE:GVG), a value-added provider of vacation products and services, today said that it will not meet analysts' expectations for the second quarter and full year. The Company said that it had experienced a number of operating problems at its Globetrotters brand, including delays in integration timing that produced cost overruns and delays in introducing marketing programs, that led to significant revenue shortfalls. The Company also said that investments in growth initiatives, including the Internet and introduction of the Better Homes & Gardens Vacations product in the fall, also will have a negative impact on 1999 earnings.

The Company expects second quarter results to be between $0.02 and $0.04 per share, compared to a consensus analyst estimate of $0.17 for the 1999 second quarter. In addition, the Company said it expects earnings for the year to be substantially below estimates.

"Obviously, we are disappointed about our earnings," said Roger Ballou, chairman and chief executive officer. "We believe, however, that this is a 1999 event and that we have laid the groundwork for growth in 2000. The fundamentals of our industry and our business are strong, and we remain optimistic about the future."

Ballou noted that the Company had installed a new management team at its Globetrotters brand and appointed Cheryl Van Horn, a 29-year travel industry veteran, as president. "Cheryl already has accelerated marketing plans and strategies for the year 2000, and we are confident that she is taking the right steps to put Globetrotters back on its original planned growth track.

"Our other brands--Classic Custom Vacations and Allied Tours--remain on target," he added. "Classic successfully launched its Caribbean and European products and is well along in the planning process for the introduction of a Mexico package in the year 2000."

Ballou said that the Company would continue to execute its business plan and will continue to opportunistically pursue acquisitions. In addition, he noted that the Company is stepping up its Internet marketing efforts. "We believe that long term, the Internet will be a critical marketing tool for the leisure travel industry, and we have invested in the technology that will support our efforts in this area. We have established three successful web sites and are in the process of making them completely interactive. We also are building alliances with major Internet players as distribution channels."

"This doesn't change any of our fundamental beliefs," he said. "Our strategy remains sound, and we believe we are making the necessary adjustments. We have invested in the future and are confident about our long-term prospects."

Separately, the Company announced that the board of directors had authorized increasing GVG's stock purchase plan from 250,000 to 500,000 shares. To date, the Company has acquired approximately 160,000 shares on the open market under its existing repurchase plan. "Our board and management remain confident about the future of our company," Ballou noted.

Global Vacation Group, headquartered in Washington, D.C., is a value-added provider of vacation products and services. Global Vacation Group's family of brands includes Classic Custom Vacations, which creates customized vacation packages for upscale U.S. travelers, Globetrotters, which is targeted to the popularly priced-vacation buyer, and Allied Tours, which creates and coordinates packages and tours for international vacation wholesalers.

The matters in this press release include "forward looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are qualified by cautionary statements contained herein and in Global Vacation Group's filings with the Securities and Exchange Commission.