Bigger isn’t always better

Ian-McMahonWe all love a David and Goliath contest – well, we do when David wins.

And such was the case at last month’s National Travel Industry Awards when the (relatively) small Travellers Choice vanquished not one but two giants, Helloworld and Flight Centre, in the contest for the coveted Best Travel Agency Group award.

In June I labelled the Travellers Choice challenge for this award “quixotic”. I was wrong. Don Quixote’s windmill-tilting was fruitless. But Travellers Choice, like David against Goliath, has slain its bigger rivals.

Congratulations are also due to the “boutique” Magellan Travel Group which took out the new Best Non Branded Travel Agency Group award.

It is surely significant that in 2015 the nation’s premier awards for travel agency chains have both gone to relatively small groups founded on the premise that agents should control their own destiny.

Travellers Choice, now a national chain, was born out of the Western Australian agency co-operative, Community Travel. While its corporate structure has been refined, a key feature remains that Travellers Choice cannot be sold without the consent of its members.

Magellan Travel Group was born out of the frustration of a number of former American Express travel agents, dismayed to find that they had been merged into Travelscene when Amex withdrew from retail travel. Magellan is set up as a trust and, as with Travellers Choice, a key feature is that it cannot be sold without the consent of its members.

These models – which also include the Australian Travel Agents Co-operative – have attracted many agents once loyal to other chains who became disillusioned as Harvey World, Jetset, Traveland, Travelscene, Travelworld and others were swallowed up by mergers over which they had no control.

Another major element attracting recruits to these business models has of course been transparency. Member agents are kept aware of overrides earned by the group and they can see how the funds are distributed to members. It is a relatively easy task for recruiters to portray this as superior to the more opaque processes of companies diverting an unspecified percentage of override funds to dividends for shareholders.

It is possible to exaggerate the potency of these features of the business models of the two chains adjudged as the nation’s best in 2015. When all is said and done, they account for only a few hundred of Australia’s travel agencies. Many more continue to operate in more traditional set-ups. However their NTIA victories are testament to the power of agents taking responsibility for their future.