Maestro signing up travel agents seeking direct deals with overseas suppliers

Issues & Trends – October 2012

Maestro signing up travel agents seeking direct deals with overseas suppliers

TWO years ago, after a Council of Australian Tour Operators (CATO) meeting in Sydney, a couple of veteran wholesalers had a quiet drink together and chewed the fat over industry issues.

Simon Hills was a former Tempo Holidays chief executive and the founder of Icon Holidays; John Morley was the former chief executive of Kirra Tours. Their chat that night ultimately led to this month’s launch of Maestro Travel.

Maestro will enable agents to buy net rate product direct from suppliers around the world.
This “effectively eliminates the wholesaler in the supply chain”, the launch announcement tells us.

Provocative stuff from two former committee members of the wholesalers’ body, CATO, one of whom (Hills) was also a long-serving chairman.

The “elimination” of wholesalers may not be quite as draconian as it sounds. Hills says he envisages agents will use Maestro to source FIT business four- star and above, accounting for perhaps 15 per cent of their turnover.

Nevertheless it is obvious that the Sydney musings of Hills and Morley homed in on a vexed issue aired at many CATO meetings – the increasing tendency of retail agents to book direct with suppliers over the internet rather than through local wholesalers.

Hills is clear in his view about the internet and travel distribution. “It is not a threat, it is a tool,” he says.

The formation of Maestro involved two years research and planning. The pair called on consultant, Peter Watson of Travel Solutions, for advice. Like them, Watson is a travel distribution veteran. His deep experience of retail operations complemented their whole-sale backgrounds.

Hills also cheerfully admits he closely studied Virtuoso, the invitation-only international network of agents specialising in luxury travel, and Ensemble, which he describes as a “Magellan style” upmarket North American agency chain, and borrowed elements of both.

Maestro will deal only with “an exclusive coterie” of agents – probably between 100 and 200 Australia-wide – who will have sole access to Maestro inventory within their postcode.

Indicating that Hills and Morley have not been idle since they agreed on the concept, Maestro has launched with partnership agreements with selected on-location DMCs and product suppliers in 28 countries.

Product range includes accommo-dation, coach tours, transfers, sight-seeing, museum and theatre tickets, private tours, FIT arrangements – basically the full gamut of travel products, according to the launch announcement.

Hills says there are some gaps and he and Morley are attending next month’s World Travel Market in quest of additional suppliers in Africa, South America, Canada and China.

Compared to setting up this global supply network, Hills claims the signing of agents has been relatively easy. “We have had agents signing up and asking to buy the rights in neighbouring post codes,” he claims.

“We have quickly signed up 20 foundations members in Victoria and they are contributing enormously to the development of product and systems.

“Our next target will be South Australia (where Morley is a respected figure) and then NSW.

“A lot of agents are dealing direct with overseas suppliers they don’t know much about. We’ve taken two years to put together an outstanding network of suppliers and DMCs.

“By focusing on full service DMCs we can enable agents to offer FIT clients meet and greet services and someone to contact in case of emergency. The hotel websites don’t offer that.

“We will be turning each of our agent members into their own wholesaler, if you like. They can purchase product direct from suppliers, add their own mark-up and address falling margins.”

He adds Maestro agents will avoid foreign exchange exposure. They will log in to the Maestro website to seek quotes from suppliers with a copy going to Maestro. The supplier will send the quote to Maestro which will convert the quote to Australian dollars, and send on to the agent.

The agent will pay Maestro in Australian dollars meaning Maestro takes the foreign exchange risk. Maestro will take a small commission from the supplier.



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