<PAGE>   1


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934



FOR QUARTER ENDED MARCH 31, 2000


Commission File No. 001-14353



                           GLOBAL VACATION GROUP, INC.
             (Exact name of Registrant as specified in its charter)


             NEW YORK                                      13-1894567
-----------------------------------                   ----------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification Number)



1420 NEW YORK AVENUE, N.W., SUITE 550 WASHINGTON D.C.       20005
--------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)


Registrant's telephone number, including area code:  (202) 347-1800


      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.


                                YES   X    NO
                                   ----      --

As of May 12, 2000 there were 14,392,825 shares of Registrant's Common Stock
outstanding.


<PAGE>   2


                                      INDEX


<TABLE>
<CAPTION>
                                                                                                      Page No.
                                                                                                      --------

<S>                                                                                                      <C>
PART I.     FINANCIAL INFORMATION..........................................................................3


            Item 1.    Financial Statements (unaudited)....................................................3


                                   Condensed Consolidated Balance Sheets as of
                                   March 31, 2000, and December 31, 1999...................................4

                                   Condensed Consolidated Statements of Operations
                                   For the Three Months Ended March 31, 2000 and 1999......................5

                                   Condensed Consolidated Statements of Cash
                                   Flows for the Three Months Ended March 31, 2000 and 1999................6

                                   Notes to Condensed Consolidated Financial Statements....................7


            Item 2.    Management's Discussion and Analysis of Financial
                       Condition and Results of Operations................................................11

                                   Results of Operations..................................................13
                                   Liquidity and Capital Resources........................................14

            Item 3.    Quantitative and Qualitative Disclosures About Market Risk.........................16


PART II.    OTHER INFORMATION.............................................................................17

            Item 4.    Submission of Matters to a Vote of Security Holders................................17

            Item 6.    Exhibits and Reports on Form 8-K...................................................17
</TABLE>



                                       2
<PAGE>   3



ITEM 1. FINANCIAL STATEMENTS





















                                       3
<PAGE>   4



                  GLOBAL VACATION GROUP, INC., AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)


<TABLE>
<CAPTION>
                                                                                           March 31,            December 31,
                                ASSETS                                                       2000                  1999
                                                                                       -----------------      ---------------
                                                                                         (unaudited)
<S>                                                                                   <C>                    <C>
Current assets:

Cash and cash equivalents (includes $5,383 and $1,219
  of restricted cash, respectively)                                                    $         45,672       $       24,152
Short-term investments                                                                               25                  103
Accounts receivable, net of allowance of $646 and $1,222, respectively                           18,749               20,068
Loans receivable from shareholders                                                                  115                  105
Other current assets                                                                              8,472               10,718
                                                                                       -----------------      ---------------
                   Total current assets                                                          73,033               55,146
                                                                                       -----------------      ---------------

Property and equipment, net                                                                      22,400               22,615
Related party and other long-term receivables                                                       935                  963
Intangible assets, net                                                                           96,968               97,754
Other assets                                                                                      2,134                2,197
                                                                                       -----------------      ---------------

                   Total assets                                                        $        195,470       $      178,675
                                                                                       =================      ===============

         LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued expenses                                                  $         61,618       $       62,873
Customer deposits                                                                                57,332               36,704
Current portion of long-term debt                                                                 5,000                5,082
                                                                                       -----------------      ---------------

                   Total current liabilities                                                    123,950              104,659


Long-term debt, net of current portion                                                           24,431               24,431
Other long-term liabilities                                                                       1,019                  621
                                                                                       -----------------      ---------------
                   Total liabilities                                                            149,400              129,711


Commitments and Contingencies
Shareholders' equity:
   Preferred Stock, $.01 par value, 6,000,000 shares authorized,
    no shares issued and outstanding.                                                                 -                    -
   Common Stock, $.01 par value, 60,000,000 shares authorized, 14,775,816,
    and 14,747,576 shares issued, respectively.                                                     148                  148
  Deferred compensation                                                                             (25)                 (28)
  Additional paid-in capital                                                                     95,771               95,771
  Retained deficit                                                                              (47,508)             (44,611)
  Treasury stock, 382,991 and 382,991 shares at cost, respectively                               (2,316)              (2,316)
                                                                                       -----------------      ---------------
                   Total shareholders' equity                                                    46,070               48,964
                                                                                       -----------------      ---------------
Total liabilities and shareholders' equity                                             $        195,470       $      178,675
                                                                                       =================      ===============
</TABLE>

-------------------------------------------------
See Notes to condensed consolidated financial statements.




                                       4
<PAGE>   5

                  GLOBAL VACATION GROUP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
                                   (unaudited)



<TABLE>
<CAPTION>
                                                                                              Three Months Ended
                                                                                 --------------------------------------------
                                                                                                  March 31,
                                                                                                  ---------
                                                                                         2000                   1999
                                                                                 ---------------------  ---------------------

<S>                                                                             <C>                    <C>
Net revenues                                                                     $             27,352   $             22,759
Operating expenses                                                                             27,367                 21,421
                                                                                 ---------------------  ---------------------

                       Gross profit                                                               (15)                 1,338

General and administrative expenses                                                             2,418                  3,067

Depreciation and amortization                                                                   1,851                  1,046
                                                                                 ---------------------  ---------------------
  Loss from operations                                                                         (4,284)                (2,775)
                                                                                 ---------------------  ---------------------

Other income (expense)
         Interest income                                                                          529                    455

         Interest expense                                                                      (1,148)                  (144)

         Other                                                                                    (12)                     9
                                                                                 ---------------------  ---------------------
                       Total                                                                     (631)                   320
                                                                                 ---------------------  ---------------------

Loss before income taxes and extraordinary item                                                (4,915)                (2,455)

Income tax benefit                                                                              2,018                    917
                                                                                 ---------------------  ---------------------

 Loss before extraordinary item                                                                (2,897)                (1,538)

Extraordinary item, net of income tax benefit of $144                                               -                   (257)
                                                                                 ---------------------  ---------------------

  Net loss                                                                       $             (2,897)  $             (1,795)
                                                                                 =====================  =====================

Basic and diluted net loss per common share:

 Loss per share before extraordinary item                                        $              (0.20)  $              (0.10)

 Extraordinary item per share                                                    $                  -   $              (0.02)
                                                                                 ---------------------  ---------------------

 Basic and diluted net loss per share                                            $              (0.20)  $              (0.12)
                                                                                 =====================  =====================

Basic and diluted weighted average
   shares outstanding                                                                          14,393                 14,706
                                                                                 =====================  =====================
</TABLE>

See Notes to condensed consolidated financial statements.



                                       5
<PAGE>   6



                  GLOBAL VACATION GROUP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                                         Three Months Ended
                                                                                              ------------------------------------
                                                                                               March 31, 2000     March 31, 1999
                                                                                              ------------------------------------

<S>                                                                                             <C>               <C>
Cash flows from operating activities:

     Net loss                                                                                    $    (2,897)      $    (1,795)
     Adjustments to reconcile net loss to net cash provided by operating activities:
        Depreciation and amortization                                                                  1,851             1,030
        Write-off of deferred financing costs                                                              -               401
        Amortization of deferred financing costs                                                         248                16
        Amortization of deferred compensation                                                              3                30
        Changes in assets and liabilities, excluding effect of acquisitions
                   Accounts receivable                                                                 1,319             1,001
                   Other assets                                                                        2,139               319
                   Accounts payable and accrued expenses                                              (1,256)           (3,561)
                   Customer deposits                                                                  20,628             9,863
                   Other liabilities                                                                     398            (1,172)
                                                                                                 -----------       -----------
     Net cash provided by operating activities                                                        22,433             6,132
                                                                                                 -----------       -----------

     Cash flows from investing activities:


        Purchases of property and equipment                                                             (909)           (1,076)
        Net sales (purchases) of investments                                                              78              (530)
        Acquisitions, net of cash acquired                                                                 -            (2,296)
                                                                                                 -----------       -----------
     Net cash used in investing activities                                                              (831)           (3,902)
                                                                                                 -----------       -----------

     Cash flows from financing activities:

        Net payments on loans to/from related parties                                                      -               411
        Payments on capital lease obligations                                                            (82)                -
        Proceeds from borrowings under credit agreement                                                    -            10,250
        Repayment of borrowings from credit agreement                                                      -            (5,200)
        Deferred financing costs                                                                           -              (286)
        Purchase of treasury stock                                                                         -              (590)
                                                                                                 -----------       -----------
   Net cash (used in) provided by financing activities                                                   (82)            4,585
                                                                                                 -----------       -----------
   Net increase in cash and cash equivalents                                                          21,520             6,815
   Cash and cash equivalents beginning of period                                                      24,152            30,317
                                                                                                 -----------       -----------

   Cash and cash equivalents end of period                                                       $    45,672       $    37,132
                                                                                                 ===========       ===========

Supplemental disclosures of cash flow information:
                                      Cash paid for:

                                                      Taxes                                      $         4       $       170
                                                      Interest                                   $       638       $       130
</TABLE>

See Notes to condensed consolidated financial statements



                                       6
<PAGE>   7



                  GLOBAL VACATION GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000
                                   (UNAUDITED)

1.  BUSINESS DESCRIPTION AND ORGANIZATION

   Global Vacation Group, Inc. (the "Company" or "GVG") is one of the largest
U.S. providers of value-added vacation products and services targeted to
higher-income travelers. The Company assembles air, hotel, rental car and other
travel components in bulk and provides complete vacations to travelers through
retail travel distributors, such as travel agents, and other distribution
channels, including the Internet and affinity groups. The Company provides
flexible independent travel programs for individuals as well as escorted tours
and group packages. Global Vacation Group, Inc.'s common stock is traded on the
New York Stock Exchange under the symbol "GVG".

   Headquartered in Washington D.C., the Company markets its major products
under the brand names Classic Custom Vacations, Vacations By Globetrotters, and
Allied Tours. Classic Custom Vacations creates customized vacation packages for
U.S. travelers seeking an individualized vacation. The Globetrotters brand is
targeted to the popular priced vacation buyer. The Allied Tours brand creates
packages for international travelers visiting the U.S.

   In March 1998, the Company was recapitalized and between March 1998 and June
1999 acquired the stock or assets of seven other vacation providers and one
information system provider. Through these acquisitions, GVG acquired the
outstanding capital stock of Haddon Holidays, Inc. ("Haddon"), Classic Custom
Vacations ("Classic"), Globetrotters, Inc. ("Globetrotters"), Friendly Holidays,
Inc. ("Friendly"), Island Resort Tours, Inc. ("Island"), International Travel &
Resorts, Inc. ("ITR"), and substantially all the assets of MTI Vacations, Inc.
("MTI"), and Trase Miller Solutions, Inc. ("Trase Miller") (collectively, the
"Acquisitions" or the "Acquired Businesses").

Risks and Other Important Factors

   For the year ended December 31, 1999, the Company incurred a net loss of $3.5
million stemming in part from a decrease in gross profit of approximately $6.7
million in 1998. As a result of these losses, the Company was required in
October 1999 to amend its credit agreement (see Note 5). The credit agreement,
as amended, requires the Company to meet certain financial ratios and covenants.
If the Company is not profitable commencing in the second quarter of 2000 and
for the year ended December 31, 2000, it is unlikely that the Company will
remain in compliance with the financial covenants of its credit agreement.
Although there can be no assurance that the Company will meet its financial
covenants, management believes that the Company should be able to operate under
the amended credit agreement for at least the remainder of 2000.

   If the Company is unable to meet its financial ratios and covenants, the
Lenders could require the Company to repay the entire outstanding loan. In that
event, the Company would be required to generate additional equity or cash other
than from operations. Although the Company believes it has the ability to
generate additional equity, these actions may be dilutive and there can be no
assurances that adequate funds will be available, or available on terms that are
reasonable or acceptable to the Company.

   The success and future of the Company is dependent on its ability to maximize
revenue growth and profitability from its Classic Custom Vacations and Allied
Tours brands, while turning around the performance of its Vacations By
Globetrotters brand. Management believes that it has addressed the integration
driven operating problems at Globetrotters. If, however, management is
unsuccessful in its efforts at Globetrotters, then the Company may be required
to restructure its operations. If the Company is required



                                       7
<PAGE>   8

to restructure or sell certain of its operations, there can be no assurances
that the carrying value of the Company's assets will be fully realized.

   The Company's operations are subject to certain risks and uncertainties,
including, among others, current and potential competitors with greater
resources, dependence on effective information systems, changing industry
dynamics related to new methods of distribution within the travel industry,
industry consolidations, seasonal fluctuations in operating results, dependence
on rapidly changing technologies, reliance on key personnel, international
political and economic conditions impacting travel patterns, and dependence on
travel suppliers.

2. Summary of Significant Accounting Policies

   The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

   The quarterly condensed consolidated financial statements included herein
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC") and include, in
the opinion of the Company, all adjustments, consisting of normal and recurring
adjustments, necessary for a fair presentation of interim period results.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to such rules and
regulations. The Company believes that its disclosures are adequate to make the
information presented not misleading. These condensed financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Company's 1999 Form 10-K. The results of operations for the
three month period ended March 31, 2000 are not necessarily indicative of the
results to be expected for the full year.

   There have been no significant changes in the accounting policies of the
Company during the periods presented. For a description of these policies, refer
to Note 2 to the Consolidated Financial Statements and related Notes thereto
included in the Company's 1999 Form 10-K.

Net Revenues

   Net revenues include commissions and markups on travel products and services,
volume bonuses received from travel suppliers, cancellation fees and other
ancillary fees such as travel waiver and insurance products and are generally
recognized upon the commencement of travel. For the three months ended March 31,
2000 and 1999, the Company had net revenues of $27.4 million and $22.8 million,
respectively, and net (loss), before extraordinary charges, of ($2.9) million
and ($1.5) million, respectively, derived from a total dollar value of travel
products and services of $120.4 million and $96.2 million, respectively.

Income Taxes

   The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standard ("SFAS") No. 109, "Accounting for Income Taxes."
Under SFAS No. 109, deferred tax assets and liabilities are computed based on
the difference between the financial statement and income tax bases of assets
and liabilities using the enacted marginal tax rate. SFAS No. 109 requires that
a net deferred tax asset be reduced by a valuation allowance if, based on the
weight of available evidence, it is more likely than not that some portion or
all of the net deferred tax asset will not be realized.



                                       8
<PAGE>   9

Long-lived Assets

   The Company reviews its long-lived assets, including property and equipment,
identifiable intangibles, and goodwill whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be fully
recoverable. To determine recoverability of its long-lived assets, the Company
evaluates the probability that future undiscounted net cash flows will be less
than the carrying amount of the assets.

   After considering the Company's 1999 and first quarter 2000 performance,
management evaluated the carrying value of its Acquired Businesses and related
intangible assets including goodwill. This evaluation was made at each of the
Company's operating brands. Given that the Acquisitions were all consummated in
either 1998 or 1999 and that management's cash flow forecast supports the
carrying value of the respective assets, management concluded that no adjustment
to the carrying value of long-lived assets was needed at this time.

   The Company's estimates of anticipated net revenues, gross profits, the
remaining estimated lives of tangible and intangible assets, or both, could be
reduced significantly in the future due to changes in technology, regulation, or
competitive pressures in any of the Company's individual operating brands. As a
result, the carrying amount of long-lived assets and intangibles including
goodwill could be reduced materially in the future.

Net Loss per Share

   Basic income or loss per share is computed by dividing net income or loss
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted income or loss per share includes the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock.

   The treasury stock effect of options to purchase 1,363,561 and 1,705,607
shares of common stock outstanding at March 31, 2000 and 1999, respectively have
not been included in the computation of diluted loss per share for the three
months ended March 31, 2000 and 1999 as such effect would be anti-dilutive.

New Accounting Standards

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." The
Statement establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. SFAS No. 133 was initially proposed to be
effective for all fiscal years beginning after June 15, 1999, however the FASB
issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133", and the
effective date of this SFAS has been deferred until issuance by the FASB.
Management has not yet determined the impact of adopting this statement, but
believes it will not have a material impact upon the Company's results of
operations or financial position.

   In January 2000, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition." The Bulletin
provides guidance for applying generally accepted accounting principles to
revenue recognition, presentation and disclosure in financial statements filed
with the SEC. SAB No. 101 is effective no later than the second quarter for
fiscal years beginning after December 15, 1999. Management has not yet
determined the impact of adopting this statement



                                       9
<PAGE>   10

3. Acquisitions

   Since March 1998, the Company has acquired Haddon, Classic, Globetrotters,
Friendly, ITR, Island and substantially all of the assets of MTI and Trase
Miller. Each of these acquisitions was acquired with cash and certain assets.
The Company financed the Acquisitions with proceeds from the issuance of
additional shares of convertible preferred and common stock and from borrowings
under its Credit Facility. The acquisition of each of these businesses has been
accounted for as a purchase for financial reporting purposes. The Company
allocated the excess of the purchase price over the fair value of net assets
acquired to goodwill. The Company amortizes goodwill over 35 years.

   In connection with the 1999 and 1998 acquisitions, the Company recognized
approximately $5.3 million in liabilities as the cost of closing redundant
facilities and terminating certain employees. As of December 31, 1999,
approximately $3.2 million of the accrual remained. During the three months
ended March 31, 2000, the Company charged approximately $135,000 against the
accrual for amounts paid during this period. The remaining accrual relates
primarily to lease and severance costs, substantially all of which are expected
to be paid in 2000.

4. Commitments and Contingencies

   The Company is periodically a party to disputes arising from normal business
activities. In the opinion of management, resolutions of these matters will not
have a material adverse effect upon the financial position or future operating
results of the Company, and adequate provision for any potential losses has been
made on the accompanying financial statements.

5. Second Amended Credit Facility

   The Company's operating results during the year ended December 31, 1999
required the Company to restructure its credit facility agreement (the "Second
Amended Agreement") with the Lenders. The Second Amended Agreement changes the
previously established acquisition line of credit into a revolving line and
adjusts the total capacity of the facility to $41 million with maturity on
January 31, 2002. The facility allows for cash borrowings of up to $35 million
and for the issuance of standby letters of credit up to a total of $10 million.
The total commitment and amount available for cash borrowings are scheduled to
reduce by $5 million on January 14, 2000, December 31, 2000 and December 31,
2001 with the final $26 million at maturity. In December 1999, the Company made
a voluntary permanent prepayment of $5 million satisfying the January 14, 2000
scheduled reduction. Under the Second Amended Agreement, the Company will
continue to pay interest at an alternate base rate advances ("ABR Advances") or
eurodollar advances ("Eurodollar Advances") plus an applicable margin. Through
October 1, 2000 the applicable ABR and Eurodollar Advance Margins are 2.25 and
3.50 percent, respectively.

   The Second Amended Agreement also revised the requirements of the Company to
meet certain financial ratios and covenants, including minimum EBITDA, minimum
customer deposit coverage, interest coverage, and limitations on capital
expenditures. The Company received relief from the fixed charge ratio and
leverage ratio until October 1, 2000. In exchange for these waivers, the Company
agreed to a fee equal to 1.5% of the outstanding credit facility. The Second
Amended Agreement also contains an additional fee provision of up to 1.5% of
outstanding borrowings if the Company does not raise a minimum of $25 million in
equity. The additional fee is earned by the Lenders in 0.25% increments at 90,
120, 150, 180, 240, and 300 days from October 28, 1999. During the three months
ended March 31, 2000, the Company paid $270,000 of these additional fees.

   As of March 31, 2000 of the total facility commitment of $36 million and
maximum available for cash borrowings of $30 million, the Company had $29.4
million of outstanding borrowings and has issued $5.7



                                       10
<PAGE>   11

million in standby letters of credit leaving $0.6 million available for cash
borrowings or up to $0.9 million available to secure standby letters of credit.
The facility allows for additional letters of credit up to a total of $10
million provided that such additional letters of credit are secured by cash
deposited with the Lenders. As of March 31, 2000, the Company's average interest
rate on outstanding borrowings was approximately 9.85% excluding the effects of
amortization of deferred financing costs.

   During the three months ended March 31, 1999, the Company recognized an
extraordinary charge of $257,000, net of income tax effect of $144,000, related
to the restructuring of the Company's credit facility.


ITEM 2.

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

      FORWARD-LOOKING INFORMATION

   The matters discussed in this Form 10-Q include forward-looking statements
that involve risks or uncertainties. While forward-looking statements are
sometimes presented with numerical specificity, they are based on various
assumptions made by management regarding future circumstances over many of which
the Company has little or no control. A number of important factors, including
those identified above under the caption "Risk Factors" in the Company's 1999
Form 10-K which hereby is incorporated by reference, as well as factors
discussed elsewhere in this Form 10-Q, could cause the Company's actual results
to differ materially from those in forward-looking statements or financial
information. Actual results may differ from forward-looking results for a number
of reasons, including the following: (i) changes in general economic conditions
and other factors that affect demand for travel products or services; (ii)
changes in the vacation travel industry; (iii) changes in the Company's
relationships with travel suppliers; (iv) competitive factors (including changes
in travel distribution methods); and (v) the success of the Company's operating
and growth strategies (including the ability to integrate acquisitions into
Company operations, the ability of acquired companies to achieve satisfactory
operating results and the ability of the Company to manage the transition to an
integrated information platform). Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected.

Overview

   Global Vacation Group, Inc., and Subsidiaries ("GVG" or the "Company")
assembles air, hotel, rental car and other travel components in bulk and
provides complete vacations to travelers through retail travel distributors,
such as travel agents, and other distribution channels including the Internet
and affinity groups. In March 1998, the Company was recapitalized and between
March 1998 and June 1999 acquired the stock or assets of seven other vacation
providers and one information system provider. Through these acquisitions, GVG
acquired the outstanding capital stock of Haddon Holidays, Inc. ("Haddon"),
Classic Custom Vacations ("Classic"), Globetrotters, Inc. ("Globetrotters"),
Friendly Holidays, Inc. ("Friendly"), Island Resort Tours, Inc. ("Island"),
International Travel & Resorts, Inc. ("ITR"), substantially all the assets of
MTI Vacations, Inc. ("MTI"), and Trase Miller Solutions, Inc. ("Trase Miller")
(collectively, the "Acquisitions" or the "Acquired Businesses"). The
consideration for the Acquisitions consisted primarily of cash. Each acquisition
has been accounted for under the purchase method of accounting. The accompanying
financial statements for the three months ended March 31, 2000 and 1999 include
the results of operations for each of the Acquisitions from their respective
acquisition dates.

   Net revenues include commissions and markups on travel products and services,
volume bonuses received from travel suppliers, cancellation fees and other
ancillary fees such as travel waiver premiums and are



                                       11
<PAGE>   12

generally recognized upon the commencement of travel. For the three months ended
March 31, 2000 and 1999, the Company had net revenues of $27.4 million and $22.8
million, respectively, and net loss, before extraordinary charges, of $2.9
million and $1.5 million, respectively, derived from a total dollar value of
travel products and services of $120.4 million and $96.2 million, respectively.

   Operating expenses include travel agent commissions, salaries, credit card
merchant fees, telecommunications, advertising and other costs associated with
the selling and processing of travel reservations, products and services.
Commission payments to travel agents are typically based on a percentage of the
price paid for the travel product or service, but in certain circumstances are
fixed dollar amounts. Reservations agents are compensated either on an hourly
basis, a commission basis or a combination of the two. The Company's telephone
costs primarily relate to the cost of incoming calls on toll-free numbers.
General and administrative expenses consist primarily of compensation and
benefits to administrative and other non-sales personnel, fees for professional
services, and other general office expenses.

   The Company derives a significant portion of its pre-tax results from
interest earned on funds related to customer deposits and prepayments for
vacation products. Generally, the Company requires a deposit within one week of
making a travel reservation. Reservations are typically made two to three months
prior to departure. Additionally, for packaged tours, the Company generally
requires that the entire cost of the vacation be paid in full 45 to 60 days
before departure, unless reservations are made closer to departure. While terms
vary, the Company generally pays for the vacation components after the
customer's departure. In the period between receipt of a deposit or prepayment
and the payment of related expenses, these funds are invested in cash and
investment-grade securities. This cycle is typical in the packaged tour industry
and earnings generated on deposits and prepayments are integral to the Company's
operating model and pricing strategies. For the three-month periods ending March
31, 2000 and 1999, the Company had interest income of $529,000 (1.9% of net
revenues) and $455,000 (2.0% of net revenues), respectively.




                                       12
<PAGE>   13


   The following table summarizes the Company's historical results of operations
as a percentage of net revenues for the three months ended each of March 31,
2000 and 1999.

RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 THREE MONTHS ENDED MARCH 31,
                                                                           2000                                1999
                                                                           -----                               ----
                                                                Amount                %             Amount               %
                                                           -----------------------------------------------------------------------

<S>                                                        <C>                    <C>             <C>                <C>
Net revenues                                                    $27,352             100.0%          $22,759            100.0%
Operating expenses                                               27,367             100.1            21,421             94.1
                                                           -----------------------------------------------------------------------
     Gross profit                                                   (15)             (0.1)            1,338              5.9
General and administrative expenses                               2,418               8.8             3,067             13.5
Depreciation and amortization                                     1,851               6.8             1,046              4.6
                                                           -----------------------------------------------------------------------
     Loss from operations                                        (4,284)            (15.7)           (2,775)           (12.2)
                                                           -----------------------------------------------------------------------
Interest income                                                     529               1.9               455              2.0
Interest expense                                                 (1,148)             (4.2)             (144)            (0.6)
Other, net                                                          (12)             --                   9             --
                                                           -----------------------------------------------------------------------

Loss before income taxes and  extraordinary item                 (4,915)            (18.0)           (2,455)           (10.8)
Income tax benefit                                                2,018               7.4               917              4.0
                                                           -----------------------------------------------------------------------
 Loss before extraordinary item                                  (2,897)            (10.6)           (1,538)            (6.8)

Extraordinary item, net of income tax benefit of $144                --              --                (257)            (1.1)
                                                           -----------------------------------------------------------------------
  Net loss                                                     $ (2,897)            (10.6)%        $ (1,795)            (7.9)%
                                                           =======================================================================
</TABLE>

   Net revenues for the three months ended March 31, 2000 and 1999, were $27.4
million and $22.8 million, respectively, which reflects the combined net
revenues of the Company and the Acquired Businesses after the respective dates
of acquisition. The increase in net revenues of 20.2% for the three months ended
March 31, 2000 were primarily due to the full quarter effect of the 1999
acquired businesses and increased sales at the Classic Custom Vacations brand.

   The Company's net revenues generally are highest in the second and third
quarters of the year, while its expenses, as a percentage of net revenues,
generally are highest in the first and fourth quarters.

   Operating expenses for the three months ended March 31, 2000 and 1999, were
$27.4 million and $21.4 million, respectively, or 100.1% and 94.1%,
respectively, of net revenues. The increase in operating expenses is due to the
product roll out of Better Homes and Gardens in test markets and increased
advanced bookings during the three months ended March 31, 2000 in comparison to
the three months ended March 31, 1999. In addition, the operations related to
1999 acquisitions are not as impacted by seasonality changes and maintain
relatively flat levels of operating expenses from quarter to quarter.

   General and administrative expenses for the three months ended March 31, 2000
and 1999 were $2.4 million and $3.1 million, respectively, or 8.8% and 13.5%,
respectively, of net revenues. The decrease in general and administrative
expenses of 21.2% is primarily due to decreases in professional fees and outside
services and the integration of certain operations of the Acquired Businesses
into other brands.

   Depreciation and amortization for the three months ended March 31, 2000 and
1999 was $1.9 million and $1.0 million or 6.8% and 4.6%, respectively, of net
revenues. The increase is due to the amortization of goodwill and certain
intangible assets and depreciation of the technology platform acquired in the
1999 Acquisitions.



                                       13
<PAGE>   14

   Interest income for the three months ended March 31, 2000 and 1999 was
$529,000 and $455,000, respectively, or 1.9% and 2.0%, respectively, of net
revenues. The increase is due to greater levels of invested cash and generally
higher rates of returns for the three months ended March 31, 2000 in comparison
to the three months ended March 31, 1999.

   Interest expense for the three months ended March 31, 2000 and 1999 was $1.1
million and $144,000, respectively. The increase is due to higher levels of
borrowings from the Company's credit facility in the three months ended March
31, 2000 in comparison to the same period in March 31, 1999 due to the 1999
acquisitions. In addition, the average borrowing rate on debt for the three
months ended March 31, 2000 was higher due to U.S. financial market conditions
and changes in the Company's credit facility in comparison to the same period
ended March 31, 1999.

   The benefit for income taxes for the three months ended March 31, 2000 and
1999 was $2.0 million and $917,000, respectively, at tax rates of 41.1% for 2000
and 37.4 % for 1999.

   Net loss for the three months ended March 31, 1999 includes an extraordinary
charge of $257,000, net of tax benefit of $144,000, related to the restructuring
of the Company's credit facility.

   Net loss for the three months ended March 31, 2000 and 1999 was $2.9 million
and $1.8 million, respectively, or 10.6%, and 7.9%, respectively, of net
revenues.

LIQUIDITY AND CAPITAL RESOURCES

   The Company receives advance payments and deposits prior to commencement of
travel. The Company's pricing of its products and services is determined, in
part, based upon the amount and timing of advance payments received. A number of
states have regulations with respect to the financial security and handling of
customer deposits made in advance of travel. The Company believes it is in
compliance with all applicable regulations relating to customer deposits. The
Company's investment policy and its credit facility restrict investments to
investment-grade securities.

   The Company's operating results during the year ended December 31, 1999
required the Company to restructure its credit facility agreement (the "Second
Amended Agreement") with the Lenders. The Second Amended Agreement changes the
previously established acquisition line of credit into a revolving line and
adjusts the total capacity of the facility to $41 million with maturity on
January 31, 2002. The facility allows for cash borrowings of up to $35 million
and for the issuance of standby letters of credit up to a total of $10 million.
The total commitment and amount available for cash borrowings are scheduled to
reduce by $5 million on January 14, 2000, December 31, 2000 and December 31,
2001 with the final $26 million at maturity. In December 1999, the Company made
a voluntary permanent prepayment of $5 million satisfying the January 14, 2000
scheduled reduction. Under the Second Amended Agreement, the Company will
continue to pay interest at an alternate base rate advances ("ABR Advances") or
eurodollar advances ("Eurodollar Advances") plus an applicable margin. Through
October 1, 2000 the applicable ABR and Eurodollar Advance Margins are 2.25 and
3.50 percent, respectively.

   The Second Amended Agreement also revised the requirements of the Company to
meet certain financial ratios and covenants, including minimum EBITDA, minimum
customer deposit coverage, interest coverage, and limitations on capital
expenditures. The Company received relief from the fixed charge ratio and
leverage ratio until October 1, 2000. In exchange for these waivers, the Company
agreed to a fee equal to 1.5% of the outstanding credit facility. The Second
Amended Agreement also contains an additional fee provision of up to 1.5% of
outstanding borrowings if the Company does not raise a minimum of $25 million in
equity. The additional fee is earned by the Lenders in 0.25% increments at 90,
120, 150, 180, 240, and 300 days from



                                       14
<PAGE>   15

October 28, 1999. During the three months ended March 31, 2000, the Company paid
$270,000 of these additional fees.

   As of March 31, 2000 of the total facility commitment of $36 million and
maximum available for cash borrowings of $30 million, the Company had $29.4
million of outstanding borrowings and has issued $5.7 million in standby letters
of credit leaving $0.6 million available for cash borrowings or up to $0.9
million available to secure standby letters of credit. The facility allows for
additional letters of credit up to a total of $10 million provided that such
additional letters of credit are secured by cash deposited with the Lenders. As
of March 31, 2000, the Company's average interest rate on outstanding borrowings
was approximately 9.85% excluding the effects of amortization of deferred
financing costs.

   Net cash provided by operating activities for the three months ended March
31, 2000 was $22.4 million as compared to $6.1 million in net cash provided by
operating activities in the first three months of 1999. The increase of
approximately $16.3 million in operating cash flows relates primarily to the
increase in customer deposits in the first three months of 2000 in relation to
the same time period in 1999. The increase in customer deposits relates to
increased advance bookings and the effect of the 1999 acquisitions.

   The Company made capital expenditures of $909,000 in the first three months
of 2000 and $1.1 million in the three months ended March 31, 1999. The Company
used $2.3 million of cash, net of cash acquired, for acquisitions in the three
months ended March 31, 1999. The Company borrowed approximately $10.3 million
from its credit facility to finance the acquisition of Friendly Holidays for the
period ended March 31, 1999.

   Management has seen strong advance bookings for year 2000 The positive trend
in year 2000 booking patterns is a result of strong advance bookings at Classic
Custom Vacations from existing products, the recent introduction of a Mexico
vacation product line and expansion of Caribbean, U.S. and European destination
products. The Company's in-bound travel brand, Allied Tours, also continues to
post slow growth as a result of continued softness in the Latin American and
Asian economies while the corrections at the Globetrotters brand will take time
to stabilize and result in positive sales improvement.

   The success and future of the Company is dependent on its ability to maximize
revenue growth and profitability from its Classic Custom Vacations and Allied
Tours brands, while turning around the performance of its Globetrotters brand.
Management believes that it has addressed the integration driven operating
problems at Globetrotters. If, however, management is unsuccessful in its
efforts at Globetrotters, then the Company may be required to restructure some
of its operations. If the Company is required to restructure or sell certain of
its operations, there can be no assurances that the carrying value of the
Company's assets will be fully realized.

New Accounting Standards

   In June 1998, the Financials Accounting and Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities."
The Statement establishes accounting and reporting standards requiring that
every derivative instrument (including certain derivative instruments embedded
in other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. SFAS No. 133 was initially proposed to be
effective for all fiscal years beginning after June 15, 1999, however the FASB
issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133", and the
effective date of this SFAS has been deferred until issuance by the FASB.
Management has not yet determined the impact of adopting this statement, but'
believes it will not have a material impact upon the Company's results of
operations or financial position.

   In January 2000, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin



                                       15
<PAGE>   16

("SAB") No. 101, "Revenue Recognition." The Bulletin provides guidance for
applying generally accepted accounting principles to revenue recognition,
presentation and disclosure in financial statements filed with the SEC. SAB No.
101 is effective no later than the second quarter for fiscal years beginning
after December 15, 1999. Management has not yet determined the impact of
adopting this statement.

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

   The Company is exposed to market risk from changes in interest rates. The
Company prices its products and services, in part, based upon the interest
income expected to be received from investing customer deposits and advance
payments. The Company's investment policy and the terms of the Company's credit
facility restrict the Company to investing these deposits and advance payments
only in investment-grade securities. A failure of these investment securities to
perform at their historical levels could reduce the interest income realized by
the Company, which could have a material adverse effect on the business,
financial condition and results of operations of the Company.

   Borrowings under the Company's credit facility are also sensitive to changes
in interest rates. The fair value of any fixed rate debt is subject to change as
a result of movements in interest rates. Such changes could have material
adverse effect on the Company's financial position, and results of operations
and could also impact the Company's ability to successfully complete
acquisitions.



                                       16
<PAGE>   17



PART II. OTHER INFORMATION

ITEM 4.        Submission of Matters to a Vote of Security Holders

               NONE

ITEM 6.        Exhibits and Reports on Form 8-K

(a)            Exhibits

               27.1   Financial Data Schedule

(b)            The Registrant filed no reports on Form 8-K during the quarter
               ended March 31, 2000.




                                       17
<PAGE>   18


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: May 12, 2000


                                          GLOBAL VACATION GROUP, INC.



                                          By:
                                             ----------------------------------
                                                Jay G. Stuart
                                                Executive Vice President,
                                                & Chief Financial Officer








                                       18
<PAGE>   19




                                  Exhibit Index


Exhibits:

1)          27.1   Financial Data Schedule


















                                       19