Selecting your network – it’s decision time but how do you choose?

By Peter Watson*

SO you own and operate a traditional high street travel office or maybe you prefer to call it a “bricks and mortar travel agency”.

Whatever you call it, you are considering the future. You are having a good look at where your business is going and how you best position it for both the mid and the long term.

There are a number of key things that you have to look at as you put together your three to five-year plan, but I suggest the number one issue is the network that you belong to, how it contributes to your business now and how it will do so in the future.

It’s decision time, but how do you choose?

You have plenty of options, maybe many more than you realise, but you need to match them with your needs. To do that you must take a good hard look at your business and ask yourself some key questions:

  • Are you a well-established business, are you in the development phase or are you a “new entrant”? Because it makes a difference. If you are a new entrant or early in the development phase, then a franchise has to be considered as an option.
  • Do you want a franchise with a well-established brand, and a co-ordinated marketing campaign?
  • Will the brand you choose help you to grow your business? In other words, will it bring in business that you would not have got without it?

For the record, I consider Harvey World Travel (HWT) and Jetset, to be the two major brands (outside of Flight Centre of course) operating in Australia. The recent Roy Morgan research into travel agents and holiday booking trends agrees, giving HWT a 60 per cent recognition factor and Jetset a 45 per cent recognition factor.

But the same survey shows only three per cent of those people surveyed booked with HWT and a miserly one per cent with Jetset. So brand awareness alone does not always translate to business.

Perhaps you decided early on that any sort of branding is unimportant to you, and that all you really want is “buying power” and support. Then you have to consider a few more questions:

  • Will you be happy with the lower profile but with access to a strong supplier list?
  • Will the supplier list on offer match what your customers are buying – do you in fact know what your customers are buying and why?
  • What else does the group membership provide? Does it offer strong support at the back end with CRS, local marketing support packages, training and development programs, access to educationals, and expert business advice?
  • Does it offer incentives for growth, performance-based fee reductions or a consultant targeted reward and recognition scheme?
  • Does it offer options, the chance to upgrade (or downgrade) your membership?

These are outside of all of the normal, legal type questions like the term of the agreement, the cancellation and exit clauses, the fees, the payment terms and all the administration detail that needs to be sorted before you finalise the deal.

To my mind however the single most important issue relates entirely to transparency and it is this:
You want to know how the network you are considering being part of makes its money, how much it retains, how much it passes on to you and that the distribution is both fair and equitable. You also want to know what say you have in the way decisions are made, especially as they relate to your business and in the way the business is being run.

In simple terms:

  • What are the suppliers paying to head office?
  • How much is being distributed to the membership?
  • How is advertising/marketing support revenue allocated?
  • What are your fees used for?
  • Is there a council or a membership advisory board and does that board have any “real” influence.
  • Are the board members appointed or elected and if elected how?
  • How often does the group report results to members and in what manner?

I suggest that if you can’t get answers to these major questions or if you are not satisfied with the answers or if the answer simply confirms that the group is not for you then you should walk away and look for a better solution.

Your choice of network membership is one of the most important decisions that you can make, get it wrong and you will suffer the consequences for the length of the agreement, get it right and you will enjoy the benefits for the long term and you will have a strong and viable business.

* Peter Watson has spent over 40 years in the travel industry primarily in sales, marketing and distribution; he helped build large franchise networks with national and international brands and he worked with and developed smaller agency groups and single businesses. He now operates as a management consultant, travel writer, communicator, teacher/mentor and “elder statesman” within the travel industry.

 

 

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