Travellers Choice marks 40 years of independence

A model established four decades ago still has a big role to play in the future for one of Australia’s oldest agency groups.

In 1977, Peter Allen put trans-Pacific travel at the top of the music charts singing I Go to Rio.

Malcolm Fraser was Prime Minister, Jimmy Carter was in the White House and the Australian skies were ruled by Ansett and TAA.

It was the year the Space Shuttle made its first test flight, the year Star Wars was released, and the year Concorde began supersonic services between London and New York.

It was also the year six Perth travel agents came together in a partnership that would become one of the most enduring entities in the Australian travel agency landscape.

Today, Travellers Choice is celebrating 40 years since that humble Perth co-operative first appeared and began negotiating as a block with the major airlines.

Having grown to around 140 independent travel agencies in every state, the group has kicked off a year of events to honour its 1977 origins and champion the philosophy that led to its inception.

The festivities began with a cocktail party for key supporters and preferred suppliers at Sydney’s Museum of Contemporary Art late last month, and will culminate with the group’s annual national conference in November, which fittingly returns to Perth this year.

To Travellers Choice managing director Christian Hunter, the celebrations are as much about looking to the future as reflecting on the past, and he credits the group’s founders with creating a culture that still serves its members today.

“It started with just a handful of agents who realised at the time there was opportunity for them to capitalise on each other’s sales volumes and approach airlines about volume-based deals,” Hunter said.

“If they channeled all their ticketing through a single point, there was enough volume there to interest the airlines in some sort of increased financial arrangement.”

And so a co-operative was born, initially with a small group of like-minded travel agents and a single role to play in their otherwise independent operations.

“They were successful in negotiating some additional revenue through a few carriers and that enabled them to attract other members to the group,” Hunter said. “That then allowed them to extend the product line a little further.”

Originally named the Community Travel Group, its co-operative structure meant the entity was run by the members solely for their own benefit, with any profits distributed back to the membership.

Over the years the membership grew to more than 30 travel agents and the group’s board began to question what the future held for a West Australian-based buying co-operative. They decided to move on from being purely a buying group and expand into marketing services. With a new name and a new look, the group set out to develop a brand that would be better known not just within the industry but also among consumers.

“In 2001, Travellers Choice was launched,” Hunter said. “We moved into the eastern states and went on a recruitment process to sign-up interstate members, to the point where today we have members in all states and territories.”

While successful, the group’s co-op model meant it faced an onerous task complying with different regulatory requirements in each state. In 2006 the decision was made to move on from a co-op to become an unlisted incorporated business under national laws.

“But we maintained the key principles of a co-operative in our constitution,” Hunter said. “Members retain control of the organisation at all times. We have no external shareholders, there’s no private equity, the only shareholders are our members and whatever profit we generate gets distributed back to the members.

“It’s a model that works really well and rewards the members for the business they are producing.”

At its 2017 national conference in Canberra, Travellers Choice highlighted its returns to members as a key achievement. The group had announced its fourth consecutive record profit of $2.1 million in 2015/16 and had been able to increase its returns to members by 15%, resulting in a tenfold return on their membership fees.

Ninety-four per cent of the year’s profits were returned to members, matching the average paid out over the past decade. To Hunter, this is one of the core attributes that has followed the group from its earliest days in Perth.

“We’re not about building war chests within the organisation,” he said. “It’s about continuing to provide really great reward and great returns for our members. Being part of the group isn’t a cost to members, it’s a revenue generator.”

Despite progress, the past 40 years haven’t been without challenges. Industry shocks like 9/11, the Ansett collapse, the Bali bombings and a succession of natural disasters have all resulted in tough times. But the biggest challenge in that time — on the technological front — is something Travellers Choice would like to embrace as opportunity rather than threat.

“Technology has obviously been the biggest advancement over the past 40 years,” Hunter said. “Even 20 years ago, if you had a fax you were quite advanced. If you were printing out tickets you ended up with red fingers.

“One of the challenges for any independent agency has been in embracing that technology as a friend not an enemy. We’ve done a lot of work in supporting members in digital services and we’re seeing strong benefits as result of that.”

In the future, Hunter sees technological support being one of the most important evolving functions Travellers Choice will provide to its members.

“Where a lot of independent agents are challenged is with resourcing — whether that’s human resources or financial resources — in order to make that digital presence effective,” he said. “Many are hampered either in having the internal capability from a tech perspective or having the people power to do it. Being part of a group like ours affords them really cost-effective access to that area.”

As it looks to the decades ahead, Hunter said the group’s founding principles would place it in good stead.

“The original formation of the group was a pretty innovative and insightful way to structure an entity that could allow the individual businesses to retain their independence but provide greater financial rewards, so I think it was visionary in some ways.

“If the founding fathers could see where Travellers Choice is today, they’d have a tinge of pride in seeing how the group has evolved.”

 

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