Issues & Trends – October 2010

Magellan Travel Group agents share in $1.6 million

THE Magellan Travel Group distributed $1.6 million in trading surpluses to member agents in the financial year to June 30, 2010.

The boutique chain’s general manager Andrew Macfarlane said the amount represented a doubling of the money available for distribution to members at the end of the previous (2008/09) financial year.

Macfarlane was speaking to travelBulletin at the conclusion of Magellan’s 2010 annual national conference in Tasmania earlier this month.

During the conference, held over two days at Hobart’s Henry Jones Art Hotel, Magellan agents received a full financial report providing them with complete details of how the $1.6 million had been acquired and then dispensed to members, Macfarlane said.

This was in accordance with the pledges of “transparency” made by the Magellan’s founders when they set up the chain in 2008. Macfarlane also pointed to other figures indicating that Magellan is fulfilling its original charter.

• Magellan’s founders vowed to agents that the chain would run a low-overhead administration to ensure that maximum supplier overrides and bonuses passed through to the retailers who made the sales.

“Operating costs as a percentage of trading surpluses have fallen 15 percentage points and are projected to fall a further eight percentage points in the year ahead,” Macfarlane reported.

• Magellan also went to suppliers with the promise that its membership of high-end leisure agents and boutique corporate travel management companies would produce superior results for them. Macfarlane cited latest sales results to bear out this has happened.

On the airline front he revealed that Magellan agents are producing “more than 60 per cent of revenue in premium cabins for many preferred partners”.

He continued: “The group is pro-viding double digit real growth to preferred suppliers in 2010 and track-ing for top tier incentive payments with many partners. As per the Magellan model, these incentives will be distributed among members.”

The business plan for the year ahead was outlined at the conference. It included a forecast of strategic growth to 60 member agents conforming to the group’s “high-end” criteria by the end of 2011. Magellan currently has 45 members and expects this will grow to 50 by the end of this year.

Macfarlane said more than 90 per cent of the chain’s agents were represented among the 51 member delegates attending the Hobart conference. They were joined by 34 supplier delegates from partner airlines, wholesalers and tour operators.

The development of Magellan’s corporate agency base continued with TMCs and airline partners participat-ing in a corporate travel forum that included a visit to Andrew Jones Travel corporate office in Hobart.
Jones, one the co-founders of Magellan, remains chairman of the group and its board is unchanged following the Hobart conference.

The conference included a special board presentation to Magellan’s inaugural year members – the nine agencies that joined in 2008 when the group was founded.

• Full coverage of the 2010 Magellan national conference in the next issue of travelBulletin.