State of the Industry: June 2016

Mantra heads to Hawaii, Scenic in court, no river cruise stats and more in this month's look at the State of the Industry.

Big win for Danii

THIS month sees Sydney travel industry personalities Donna and Brian Meads-Barlow host the annual Jelly Bean Ball – a massive fundraising effort for type 1 diabetes sufferers which was created following the tragic death of their daughter Danii five years ago at the age of just 17. The Meads-Barlows, who own and manage Helloworld member DBT Corporate/ Cruisescene, have become passionate advocates to prevent similar tragedies in the future, creating the Danii Foundation to support the introduction of Continuous Glucose Monitoring technology which can stop so-called ‘dead in bed’ syndrome.

After years of intensive lobbying the Foundation had a significant victory last month, with Prime Minister Malcolm Turnbull committing to a $54 million election promise which will subsidise the rollout of devices to up to 4,000 Australian children and young people. The Meads-Barlows continue their efforts to improve the lives of type 1 diabetics, and have also welcomed the strong support of the industry including Helloworld which is a major sponsor of the Jelly Bean Ball.

Tickets to the black tie gala event, which is taking place at the Sydney Four Seasons on Saturday 25 June 2016, are available by emailing [email protected].

Walshe takes Delta

THE Walshe Group last month confirmed it was taking over the Delta Air Lines gsa account in Australia, with the significant win seeing Delta switch from its long association with the Helloworld-owned Global Aviation Services. The move certainly makes sense, with Walshe having represented Delta in New Zealand for more than 30 years, meaning the company has deep knowledge of the airline’s network, product and services. Walshe will base the Delta representative office in Sydney, undertaking reservations, ticketing, sales and marketing, with additional GSA team members in Melbourne and Brisbane along with the existing NZ team in Auckland.

Delta’s shift to Walshe looks to have come at a tricky time for the Helloworld representation businesses, World Aviation Systems and Global Aviation Services. Although the company isn’t commenting, it’s understood there is some sort of legal action under way and senior executives including general manager James Vaile and Gia Acitelli no longer appear on the World Aviation website.

Scenic in court

RIVER cruising gained some unwelcome publicity last month when the class action against Scenic Tours Pty Ltd brought by some aggrieved passengers affected by flooding in Europe in 2013 was heard in the Supreme Court of NSW. North Sydney-based law firm Somerville Legal is leading the charge, alleging Scenic knew its cruises were likely to be disrupted but still allowed passengers to travel all the way from Australia without giving information about the likely impact. Television reports on the hearing cited testimony likened the experience to a “second rate bus tour”.

The case is now awaiting a final ruling, with Somerville and Scenic both submitting written arguments. Interestingly part of Scenic’s defence is that it is not actually an operator of river cruises in Europe, but instead uses “independent contractors” – namely a German company called Scenic Tours Europe AG and Luftner Cruises AG – which may be true, but certainly creates the impression the firm is trying to duck responsibility. The case may also have wider implications for how the industry deals with clients, with Scenic in part basing its defence on terms and conditions in its 2013/14 brochure which “appeared in small font on page 218 of a booklet comprising about 225 pages,” according to court documents.

No river cruise stats

The integration of the former International Cruise Council Australasia into the global CLIA organisation has brought with it many benefits – but some local members of the organisation are likely to be very disappointed at one outcome of the merger, which has seen river cruise figures no longer collated as part of the much-anticipated annual CLIA statistics. The change is part of a globalisation of CLIA which wants to have its figures directly comparable across regions – but ignores the huge significance of the river cruise business in Australia.

Last year’s CLIA figures reported that about 70,000 Australians travelled to Europe to undertake a river cruise – not far off the 100,000 or so who took a European ocean voyage. While river cruising on a global scale is only a small blip on the radar for the ocean cruise giants, clearly that is not the case in Australia where it enjoys a much more significant market share in terms of both passenger numbers and cruise spending. Omitting river cruising from the figures looks to be short-sighted, impacting the relevance of CLIA to some of its most supportive Australian cruise line members. CLIA says it hopes to release a “more detailed standalone river cruise report at a later date” – something that is sure to be keenly awaited by the whole industry.

Value alliance launches

THE global airline business model continued to evolve last month when eight Asian lowcost carriers banded together to offer their products on a single website. Members of the new Value Alliance include Scoot, Tigerair Singapore, Cebu Pacific, Jeju Air, Vanilla Air, Nok Air, NokScoot and Tigerair Australia, with the site allowing customers to view, select and book fares and ancillaries from any of the carriers in a single transaction. The site is based on new technology developed by a company called Air Black Box, which has filed for NDC certification with IATA.

The Value Alliance carriers collectively operate 176 aircraft across the Asia Pacific region, with the solution offering them stronger distribution in non-home markets, the expansion of networks via interline itineraries and a better one-stop shopping experience for customers.

Meanwhile Jetstar, which notably isn’t part of the group, issued a statement touting its network which offers “the same product, level of service and flight experience across any of our airlines”.

TA fishing for visitors

TOURISM Australia launched an enhancement to its ‘Nothing like Australia’ campaign at last month’s Australian Tourism Exchange, and this time it’s all about fishing. TA managing director John O’Sullivan told travelBulletin the move followed research which showed it was an area of “untapped tourism potential,” with more than 300,000 international visitors throwing in a line last year, representing 5% of all inbound tourists. “Fishing is one of Australia’s biggest sports and leisure pastimes, but international awareness of just how much our country has to offer in this area is something we want to improve,” O’Sullivan said.

The appearance at Australian Tourism Continues from previous page Exchange by Australian Hollywood superhunk Chris Hemsworth also set many hearts-a-flutter. Hemsworth, whose gravelly tones underscore Tourism Australia’s latest campaign collateral, turned up at the official ATE welcome event where he gave a candid presentation about his favourite holiday spots in Australia.

Livn activities vision

TOUR and activity distributor Livn Group almost became listed on the Australian Stock Exchange last month, via a backdoor arrangement with resources minnow Capital Mining. The deal was pulled at the last minute, with Livn CEO Sean Cummins saying the proposal was “not the right fit”. However pundits are keeping a close eye on the company, with Livn expected to seek further opportunities to help fund its rapid expansion.

Livn has just launched a new virtual credit card payment system, which it says makes it the first major wholesaler to pay suppliers after a tour has been booked rather than up to a month after the date of travel. The move is a significant disruption to the tour and activity space, promising to boost the cashflow of the operators of the more than
12,500 instantly bookable tours and activities offered by Livn. Key suppliers include Intrepid, G Adventures, Gray Line and Pro Dive, with Flight Centre and Red Balloon among the company’s retail partners.

Mantra heads to Hawaii

MANTRA Group, the accommodation business which grew out of the former Stella Travel & Hospitality, has gone from strength to strength since it became separately listed on the Australian Stock Exchange in 2014. The company’s brands include Mantra, Peppers and Breakfree, with the share price performing well and CEO Bob East enjoying a high profile as a newly appointed director of Tourism Australia.

Last month Mantra spread its wings into the US for the first time, with a US$52.5 million deal to take over the Ala Moana condominium hotel. Boasting more than 1,000 rooms, the property is adjacent to the well known Ala Moana shopping centre in Honolulu.

East said the acquisition was consistent with Mantra Group’s strategy to selectively expand its presence in key offshore regions by purchasing properties in destinations favoured by Australian travellers.

Further acquisitions are expected by the group, which raised the funding for the Ala Moana deal via a $100 million share placement, amounting to just over 10% of its issued capital. That means there’s a fair chunk of change in the kitty to fund so-called “pipeline opportunities”.

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