by Ian McMahon
THe Magellan Travel Group agents assembling in New Zealand this month for their 2016 annual conference will certainly be able to claim they have achieved another landmark year. But I wonder if in the years to come they will not also look back at 2016 as a watershed year.
Landmark? Magellan’s chief executive Andrew Macfarlane will tell the group’s members that they achieved double digit growth in turnover during the 2015/16 financial year. They will see how this flows through to the bottom line in the form of a $10 million-plus profit that, in accordance with the group’s business model, will be fully and transparently passed on to them in proportion to their contribution to the result.
Magellan has planted similar landmarks in each of the eight years since it hired Macfarlane. That was shortly after a small coterie of agents, comprised mainly of less than gruntled Travelscene American express members, met in Werribee, Victoria, and agreed the time was right for the launch of a group such as Magellan.
That is to say a group of established agents, usually with turnovers of $5 million or more who have no need to pay large sums of money to franchised chains for centralised branding, training and other support.
The growth of Magellan so far has vindicated the vision of those agents who came from round Australia to be at the Werribee gathering.
Indeed that growth has, in some respects, outstripped the original vision. Magellan directors initially said they wanted only about 100 members. Currently the group comprises 120 members.
And I note that, with a good number of franchise contracts coming up for renewal in 2016/17, Macfarlane is talking about getting “growth ready”.
Meanwhile the group has also expanded beyond the largely retail plus some corporate business mix of its founding members with the formation of a specialist corporate group – a move that saw Penny Spencer and Carl Buerckner joining the Magellan board. The development adds a new dimension to the group (and incidentally it also boosts the volume of premium air traffic generated by Magellan, presumably enhancing its negotiating clout with airlines).
All this has necessitated some expansion of Magellan’s famously bare-bones administration, notably the hiring of Scott Darlow to take responsibility for the corporate group and to give it a presence in Sydney. These developments are indicators of success but expansion, however prudently handled, also presents challenges. It will be interesting to see how successfully Magellan can move forward.
