Steve Jones’ Say
IT’S a commercial relationship that has survived takeovers, rebrands and restructures. But the end is nigh. After more than a decade operating the Qantas Holidays brand, Helloworld no longer sees sufficient value in the arrangement. When the current licensing deal expires in 2020, the retailer will walk away. Maybe the licensing fee simply became too high. Whatever the reason, it was an interesting move and, on the surface at least, a surprising one.
Brands in Australia don’t come any stronger than Qantas. So it follows that its wholesale operation commands significant clout in the package holiday market. Sure, the program has limited scope given it is restricted to Qantas flights and those of its partner airlines. But with sister wholesaler Viva! Holidays selling non-Qantas air packages, the two working in tandem offer a global suite of destinations. And Helloworld operated them both. So it seems an odd decision to break ties with arguably Australia’s most recognised wholesale brand.
But a more holistic view of Helloworld’s wholesale operation suggests otherwise. In addition to Qantas and Viva!, Helloworld operates its own-branded program. According to its website, there are 29 Helloworld Travel brochures, selling product not dissimilar to that of Qantas Holidays, of which there are 34 brochures across the 2019/20 seasons. Add Viva! content to the mix and you have an awful lot of generalist product.
Therein lies the issue. Apart from the sheer volume of brochures, there is the considerable cost of marketing and servicing three brands where product differentiation is relatively narrow. Little wonder, then, that the Burnes’ were keen to consolidate. In doing so, they will hope to turn focus to its own-branded product.
So what will Qantas do with its package business? Quietly drop the program? That’s very unlikely. Also unlikely will be a desire of Qantas to enter wholesaling and operate the program itself.
The airline says it is “reviewing its options”. In truth though, finding another partner to fill the void would appear its only option. Who, and what the distribution strategy would be, is harder to call.
There are scant few candidates. On the retail front, Travellers Choice and Tom Manwaring’s Express Travel Group are possible, although highly unlikely contenders, given their inexperience in wholesaling and lack of network muscle. Flight Centre, while equipped for such a task, is too pre-occupied with Infinity Holidays to be interested.
Could The Travel Corporation be tempted to re-enter the generalist market? After calling time on Creative Holidays in 2015, partly because the brand was starved of distribution, that too would seem a stretch. It all leaves Qantas Holidays in a vacuum, unsure of its place in the travel landscape.
For all the power of the brand, Qantas Holidays has no obvious home, and no clear future strategy.