State of the Industry: November 2015

TIE doubles in size

The Travel Industry Exhibition will expand into a two-city event next year, with shows to take place in both Sydney and Melbourne.

2016 will be the third year of the Travel Industry Exhibition, which had a rocky start at Sydney’s Moore Park in 2014 but this year bounced back with an acclaimed event at Luna Park which included the fabulous Travel Daily 21st Birthday Party.

This celebration will also evolve next year, to become the “Travel Daily Christmas in July,” and we hope our loyal travelBulletin readers will come and join the party too. As well as updating delegates on the latest travel and tourism product, the Sydney and Melbourne shows will also once again feature a comprehensive education program, with sessions last year so popular there was standing room only.

Bookings for exhibition space are now being accepted – for more information see www.travelindustryexpo.com.au

Helloworld NZ acquisition

AIR New Zealand is set to exit retail travel operations in New Zealand, with the sale of up to ten existing stores to

Helloworld Limited, and the closure of a further 12. According to Air NZ chief commercial officer Cam Wallace the carrier has determined that with the rapidly evolving travel distribution landscape “retail stores are no longer core business for the airline”.

Helloworld will use the new companyowned outlets to formally launch the helloworld retail brand in NZ, with the move expected to see the company rebrand its existing Harvey World Travel and United Travel franchisees as helloworld. 

However, more than two thirds of the United Travel members have resigned, with rival group First Travel announcing that it will grow by 34 new agencies. United Travel, which is 50 per cent owned by its members, voted earlier this year not to adopt the helloworld brand.

The departing agencies will remain within Helloworld as full and participating members until the end of November 2016 under their existing franchise agreements.

Flight Centre charts growth

Flight Centre’s acquisition of Brisbanebased charter aircraft specialist AVMIN continues the company’s flirtation with vertical integration.

Although Flight Centre has shied away from taking ownership in hotels and airlines, the sheer volume of its passengers must make it tempting to be in control of more parts of the distribution chain – and this deal certainly opens up some interesting possibilities.

AVMIN has built its business around VIP, sporting group and conference charters, and has a solid client base including organising passenger and freight charters for the Australian government – not to mention being contracted by Cover-More Travel Insurance to conduct an evacuation of Australian travellers after the Nepal earthquakes earlier this year.

Flight Centre ceo Graham Turner hinted at what might lie ahead – including launching new services in areas where charter is a viable alternative to scheduled air travel, or operating charters on underserved routes, in niche markets or even on key routes in peak periods to help meet demand.

It’s understood Flight Centre paid less than $2 million for a 51% stake in AVMIN, which will continue to be managed by its founder Paul O’Brien.

Qantas jacks up fares

QANTAS has advised travel agents it will be increasing its core tariff for international fares sold in Australia by between 1-4 per cent, effective 29 October.

Routes impacted include those under the joint Qantas and Emirates partnership, along with QF’s routes to South Africa, Hawaii, South America, Hong Kong, China, the Philippines, Indonesia, Korea, Taiwan, Papua New Guinea and New Caledonia. A Qantas spokesperson confirmed all international routes including Tasman services but excluding destinations in mainland USA (LAX, JFK, DFW, SFO), will be subjected to the rise.

Return Economy class fares will increase between $10-$40, while return Business class fares will jump between $20-$200, depending on the route. Agents should contact Qantas with any queries, in particular flights ticketed on or before 28 October 2015.

AOT set for listing

The AOT Group has appointed financial advisory firm Ord Minnett to assist in a possible public listing of the company. AOT owners Andrew and Cinzia Burnes already hold almost 10 per cent of Helloworld, with HLO ceo Elizabeth Gaines recently confirming the company was in talks about a potential acquisition of AOT.

However, two weeks later Helloworld announced the discussions were off because the “strategic and financial merits of the acquisition on the terms proposed were insufficiently compelling to warrant proceeding”.

Burnes has now apparently decided on a different approach, after expressing anger at the Helloworld rebuff. Ord Minnett’s most recent travel industry float was for Captain Cook Cruises owner SeaLink, with the broker also involved in share sales for Corporate Travel Management and the Mantra Group.

Meriton trips up

MERITON Apartments attracted mainstream media attention recently, over alleged attempts to manipulate TripAdvisor reviews. Meriton emails TripAdvisor feedback forms to guests after their stay, with allegations that in the case of people who complain at the front desk their email addresses were deliberately changed so they didn’t get a reminder.

A former staffer also described efforts by Meriton to pressure clients to increase low ratings, in some cases by offering reduced rates or discounts off bills. TripAdvisor wouldn’t comment on the Meriton cases, but issued a statement saying attempts to boost the reputation of a business by selectively soliciting reviews only from guests who have had a positive experience “is considered fraudulent, and subject to penalties”.

Cuts bite at Malaysia Airlines

The restructuring at Malaysia Airlines following the MH370 and MH17 tragedies has seen the carrier significantly revamp its Australian sales operations, with the carrier confirming the closure of offices in Adelaide, Perth and Darwin.

Having already axed its Brisbane flights and reduced frequencies to other ports including Perth, Sydney, Melbourne and Adelaide, the latest change will see Damien Van Eyk’s Melbourne-based office become responsible for Victoria, South Australia, Tasmania and the Northern Territory.

Perth will be serviced by the Sydney office managed by Gabrielle Vicari who looks after NSW, ACT, Queensland and Western Australia. MH assured travel agents that flight frequencies, airport operations and accounts would continue to operate as normal in each region.

Woolies less QF rewarding

Major changes to the Woolworths Everyday Rewards Program will see the scheme’s close links with the Qantas Frequent Flyer program dissolved from 1st January 2016, with the retailer instead deciding to direct the money paid to Qantas for points into a more focused in-store rewards program for shoppers.

It’s estimated that Woolworths was paying Qantas Loyalty as much as $100 million annually for the points, but Qantas has said the pullout “isn’t financially material”.

Although some consumers have expressed dismay at the split, Woolworths has done its homework and found that for the majority of its customers Qantas points aren’t as compelling as first thought.

About half of the members of Woolworths Everyday Rewards didn’t even link their card to a Qantas frequent flyer account, while a survey of customers found that only about 10% of shoppers “very much preferred” the opportunity to earn points, with the other 90% not so interested in the tie-up.

Despite the break-up with Woolworths, Qantas can certainly count the six year relationship as a success, with the pact estimated to have added as many as two million Australi
ans to its now 11 millionstrong QFFF membership base.

Qantas has assured members of the programs that it will work with Woolworths on an alternative offer once the existing agreement expires at the end of the year.

Co-branded Woolworths and Qantas credit cards will also continue to earn QF loyalty points on member spending.

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