AFTA Chairman Tom Manwaring, CEO of Express Travel Group, has led the Federation through a perfect storm over the last 12 months — including the departure of two CEOs, a global pandemic, border closures, refund demands and a 95% downturn in travel industry revenue. Amidst the chaos he’s also been navigating his own business through the minefield. Bruce Piper sat down with him to discuss the current state of play for the organisation and where it is heading.
It’s an understatement to say that COVID-19 has changed everything, and in line with the industry it represents, the Australian Federation of Travel Agents (AFTA) would have to have been one of the country’s most impacted organisations. Its role as an advocate for the travel sector has proven to never be more important, while at the same time its finances were put under severe strain as it moved to support its decimated membership base by suspending fees. The shock departures of Jayson Westbury a year ago, and then just last month his successor Darren Rudd, have seen Manwaring and the AFTA Board take a much more active role.
However rather than dwelling on the past, the irrepressible AFTA Chairman is determined to look to the future — both immediate and longer-term. And despite the ups and downs the organisation has experienced, he is quick to point out the significant gains that have been achieved.
Success in a year of pain
TB: Clearly achieving $258 million so far in Federal support for the travel industry has been a hard-fought battle — how do you feel about the overall outcome?
Tom: We have had, in the last 14 months of COVID-19, serious action from the government acknowledging that we are one of the few sectors that requires continued support in line with the suppression of travel activity. So that’s a very positive thing, and a hard-worked outcome by AFTA, ATEC, CATO and our agency community.
As a Board we pay tribute to our travel agent members from across the country who have met with their local members as part of the ongoing grass-roots campaign. The fantastic support and activity was outstanding, creating a swell of awareness and reaction never previously seen.
But it’s clearly not over. AFTA is continuing the fight for funding support from July to December.
TB: While the grant have been a big focus, I presume there are other areas of activity too?
Tom: Of course. AFTA is also working with IATA regarding the agent criteria which has to be lodged by September. Part of this is a request: we want IATA to roll over the processes from 2020 because agency revenue still remains down 80-95%.
Chargebacks, credit voucher risk and refunds are also important issues. Given the volume of credits by airlines, tour operators and cruise companies, chargebacks have the potential to be a tsunami — relating directly to agent viability and also a heavy risk impact on the ATAS brand. A number of suppliers, having gone into liquidation, have referred customers to credit card chargebacks as the refund mechanism. Some $500,000 is being refunded through the ACS insurance product via our insurer, IPP UK, throughout May, which is great. But there’s also been double/triple dipping, customers making chargeback claims as well as seeking credits or refunds.
It’s not simple. Global merchant card agreements dictating process collide with auto agent debt claims. The travel agent, who is not holding the funds, gets smashed. And business insurance cover is impossible to get in COVID-risk conditions.
TB: What are some other things on AFTA’s agenda?
Tom: Member survival has been the top focus. But there are plenty of other issues, including recognition that the “Travel Service Industry” has a value of $45 billion. We need a national training skills-based curriculum, with school leaver programs highlighting careers in the travel industry. Agents collect $1 billion a year in Passenger Movement Charges, so negotiating for some of that to be returned through skills support is an ongoing discussion.
Then there’s the student and university market — as well as inbound, these students also visit home regularly so they are vital. We need to continually drive for change within our industry to shift the agent base income to positive earnings, not delayed commission. Other things on the agenda include partnerships, supporting airlines and cruise companies, tour operators and so on through the agent distribution and service providers, all aimed to reignite the travel sector. Agency distribution must be recognised — it’s not an “auto cost saving bucket”. Consumers want choice, service, personal contact, as we restart travel through COVID.
TB: And what about borders — you recently controversially suggested the trans-Tasman travel bubble might have come too soon. Could you expand on that?
Tom: We need a far clearer position around global travel processes. Easy to say…of course we all want international travel to begin as quickly and safely as possible. In Australia and NZ, where we have escaped most of the major impacts of the pandemic, a local bubble seems an appropriate start. Domestic cruise would be a great start too.
However our sector relies on product and public confidence. The last thing we want to happen is people planning trips, only to get caught because the flights are suddenly shut down. All we’re saying is give us a roadmap, possible dates, like late 2021 bookings for 2022 travel. If international borders snap shut once or twice, that will be a disaster that will set us back more than six months. It will completely sap confidence in travel.
We also really need UK, Europe and USA capacity to open for business, to have enough supply for the agency industry to survive. We would hope we would be flying and cruising in scale for the Northern Summer of 2022 — that’s what I see as very doable, given that vaccination should be far more widespread in six to nine months. Booking patterns for that travel would then flow in the last quarter of 2021, so we would start to see cash coming through the agency distribution networks.
Representation across the board…
TB: The AFTA Board is controlled by the big travel groups. How is AFTA getting the balance right on the needs of both small and large agencies?
Tom: AFTA has evolved over the last 64 years and will continue to do so, representing all members and levels of businesses. One of the key factors considered by Governments when we are lobbying focuses on job protection and job creation. A large percentage of the people within travel are employed by the listed companies. So it’s a combination — everybody’s important.
There are now 11 Directors, comprising representatives of large public companies and medium-sized independents, most of which started as small businesses. Some are global now and Australia should be very proud of that. But all of our Board are fully aware of the pressure points of small business — they’re all intimately involved with business and its challenges.
I might mention here that the Board provide their time and effort at no fee, work very hard, outside of their own business commitments, and have not been part of the grant system to date. I’m not trying to blow our own trumpet, just supporting my comments about the Board representing all parts of the agency system. And I’m just clarifying that point for some members, whose emails seem to think otherwise.
Notwithstanding all that, we also accept that the current constitution needs some tweaking — not a wholesale revision, just some tweaks. Member engagement has to be strong, and more direct state exposure for the Board is planned.
Show me the money!
TB: AFTA’s move to waive fees in 2020/21 has certainly supported members, but left the organisation with no income. What’s the status of the Federation’s finances?
Tom: The AFTA Board considered the financial position of our members very early, with the onset of the pandemic in the first week of February 2020. And the decision was to waive the membership fees for the year. We were one of just a few associations to do this, and I think it has been appreciated by the members.
The Board stepped up to do a lot more work than before — weekly and monthly meetings, budget reviews, Government submissions, industry crisis action and so on. In doing this financial strength of AFTA came to the fore.
The office sale in previous years and relocation provided a long term financial strength to allow for membership fees to be waived for a year, some $2.2 million of income. The balance sheet is diminished but strong, to provide support for the post-COVID rebuild. Full details will be discussed at the July AGM.
TB: And what about 2021 — why should members actually put their hands in their pockets, particularly in the current environment?
Tom: We are in the process of sending out invoices to members now. The renewal process will be the same as the 2019 year — members submit their renewal details, and then pay the invoice and so on. New members are very welcome, especially those that received the first grant payment!
The $258 million in industry-specific funding should in itself explain why current and new members should be proud to join. But as I mentioned there’s a lot more going on with IATA, WTAAA, the ACCC, ATAS review, skills plan, refunds, chargebacks, borders and more. Over the past 14 months, our access and recognition in Canberra has greatly improved. It is critical that we retain that activity.
The position of ATAS, along with the wind-up of ACS effective 30 June, are also current projects.
AFTA will survive and thrive after this, as our industry will.
A new CEO for AFTA…
TB: So presumably at some stage there will be a new CEO for the Federation. What are the biggest challenges for that person?
Tom: There definitely will be a new CEO. I’m already receiving calls and emails from people, so it’s well sought-after — it’s a leading travel action and industry advocacy position.
The criteria for the new person will be slightly different — we’re switching the focus a little, given the changing landscape, and in line with members’ feedback. A lot has changed in 12 months. We will find the right candidate, holding industry, political and management strengths. The board will also remain in a semi-executive position and continue dealing with the government and industry on major policy and strategic issues.
TB: What sort of changes do you expect the new CEO to be facing?
Tom: Right throughout COVID, travel agents have proved themselves essential to consumers — this is something that really gets traction when we talk to politicians about the reality of the massive support agents have provided. Moving into the post-COVID period there will be a high requirement for qualified professional advice. In any other industry, you pay for that advice and that’s something we all have to get our head around — can our industry position itself to charge reasonable professional fees?
Distribution and service is changing, but customers will follow the structural changes with less shop fronts and more personal selling. We’ll see stronger corporate business, product innovations, and of course new health and travel processes.
We also expect a strong growth phase post-COVID. As an industry we are actually attuned to constant change, both in people skills and technology. We are a highly technology-driven and evolving industry — in fact the resilience of the sector has been unbelievable in the last 14 months; I don’t think many other industries would have survived, facing such a shut down. And that has all been underpinned by the tremendous strength of the professional agents out there. While many are in hibernation now, they will come out strong.
Up to our necks in it…
TB: How have you coped personally with the strains of the last 14 months?
Tom: It’s been a very emotional time. I think we all deserve to recognise our emotions. I like to shout at the ocean — it relieves pressure and makes you feel small! I have great support from my wife Julie, family, staff and friends which all helps as we work through this crisis. The environment we had in Melbourne, particularly the 114 day lockdown, was a very busy, tough period — hence the ocean shouting in my one hour of exercise…
We all feel for the members, especially given we’re all going through the same experiences. But we will only succeed by sticking together, by staying on the same page and having a common strategy — voicing positive messages about what we do in our industry, which is make people happy.
Travel is a happy place. I’m sitting on planes lately (in economy class of course), and I’ll sit next to business people or holiday makers, and they are excited about getting on an airplane. Even those going on a bloody business trip! And then multiply that tenfold with regard to leisure travel.
Our customers will come back strong, and so will our industry, so we need to be travel ready.