Steve Jones’ Say: February 2019

LET’S cut to the chase, members of Magellan Travel did pretty well out of the sale to Helloworld. Very well in some cases.

But let’s also realise that without the actions of a third of its agents this time last year, they would have picked up peanuts, relatively speaking.

So one year after the rebellion that sparked such unrest, has a sense of normality returned to Magellan? Did the financial gains placate the more strident members who fought against the deal?

In the course of writing a “one year on” piece for this month’s travelBulletin, it became clear from a number of interviews I conducted that the healing process still has a way to go.

While it would be wrong to paint a picture of widespread disharmony — many appear to have put events behind them and are simply getting on with running their agencies — some are finding it hard to forgive the clandestine nature of the Helloworld discussions, the almost derisory amount of money initially offered to agents and the attitude that went with it.

The distribution of sale proceeds was resolved largely to the satisfaction of agents, with everyone pocketing $150,000, $270,000 or $510,000. They are handsome sums, and there is an argument to say those still unhappy should take a look at their bank balance.

But it’s not quite that simple. The memory of the way the deal went down is still too raw for some. Even at this early stage of their initial three year contract, several agents I spoke to are already talking about jumping ship when that contract expires in 2021. One even threatened to unleash “World War 3”, without elaborating precisely what that meant.

But with that rather dramatic scenario still two years down the track (members can leave earlier on condition they relinquish their windfalls) Magellan still has plenty of time to overturn such negativity.

Andrew Macfarlane said he and his team have delivered everything they said they would since the deal was finalised. On those merits will the network be judged, he said.

In the main, he’s right. From a pure business perspective, even those agents still irked by events last year have not expressed undue concern, or reported any interference since falling under the auspices of Helloworld. Indeed, it has continued to operate in much the same way, with Helloworld providing better deals in some cases.

With that in mind, for Magellan to succeed under Helloworld, and for Helloworld to achieve a return on its considerable investment, does it really matter if some relationships remain strained? If the proposition remains strong and if members can see tangible benefits, Magellan should be confident about retaining the vast majority of its members.

The flip side is obvious. Magellan members are all proudly independent, probably more so than any other retail network. Andrew Burnes has been respectful of that. But supplier targets will inevitably increase and with that, Helloworld may demand more of Macfarlane, and his agents. That may fuel discontent.

Rival groups will be hoping that’s exactly what happens.

 

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