Perspective – Nov/Dec 2013

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Ian McMahon

 Competing chains benefit all agents

CAN we take it that the “phony peace” is now over?

By “phony peace”, I am referring to the extraordinary surface calm beneath which has been submerged the frenetic activity taking place among travel agents and travel agency groups since the company formerly known as JTG announced it is moving to a new business model called helloworld.

With 1700 outlets in Australia, the company accounts for more shops than all other travel groups combined (Flight Centre aside). So it was only natural that when it proposed a radical new strategy involving the dumping of four established retail brands a lot of its agents would take pause and consider their options.

It was also only natural that other, smaller groups would see this as an opportunity to gain new members.

What was not so natural, however, was that everyone was so coy about this reality.

To judge by the public comments of helloworld and the smaller chains, it was as though the steady trickle of former helloworld agents to groups like Independent Travel Group, Magellan Travel and Travellers Choice was happening by accident.

Finally, however, helloworld boss Rob Gurney has broken the phony peace with an attack on “a number of smaller groups searching for relevance”. In comments leaked from the revamped chain’s conference in Melbourne, Gurney depicted them as trying to “entice” his members with “business models that are based from the last century”.

A week later at the Independent Travel Group business forum, chief executive Tom Manwaring rejected his “misinformed” remarks, declaring the business model offered by his rapidly growing chain is very much a 21st Century model. (See page 21.)

Manwaring brought out into the open what everyone knows: “There’s a lot of shopping going on at the moment, we don’t shy away from that,” he said, welcoming the opportunity to build a bigger and stronger group.

Individual travel agents should welcome this vigorous competition for their allegiance – something that I feared would disappear when the Australian Competition and Consumer Commission permitted the merger that saw the four franchised chains swallowed up into JTG.

The energy on display at the ITG forum and at last month’s Magellan conference demonstrates I was wrong, I am pleased to say.

As I write, the Travellers Choice conference is under way and, while this chain does have a buying affiliation with helloworld, its offering nevertheless represents another strong, viable option for agents.

Even the usually publicity-shy CT Partners, which recently held its conference in Bangkok, has issued a statement that is a timely reminder that it can offer a commercially beneficial home for the right agents.

It says it has reached $1 billion in turnover, that it is targeting $1.5 billion within two years and that it welcomes new members to sign up for its offering with “100 per cent transparency and focus on returning all overrides to our members”.

Combine these developments with the new helloworld strategy – acknowledged as “bold” and “decisive” even by rivals – and Australian agents can only benefit from a diverse choice of competing business models.