ENTIRE steps into the rail breach
Rail Europe’s Australian and New Zealand operations, which also traded for many years locally under the highly respected Rail Plus brand, have been another victim of COVID-19, with the business set to undergo a significant downsizing including the closure of its Great Train Journeys division. Most of the team have now left the company, with chief Richard Leonard confirming that the much smaller business “won’t be able to offer all customer service channels to every single agent”.
Rail Europe has had a chequered career in recent years, particularly with a somewhat confused brand message when it switched to the Rail Europe moniker while continuing to assure the industry that “we sell more than just Europe”. However that’s all over now, with the business transitioning to a Paris-based booking platform at the end of this month.
However Entire Travel Group’s Greg McCallum, who worked at Rail Plus for more than a decade from the early 2000s, has seen a major opportunity with the Rail Europe changes and launched a new Great Train Journeys division within the Entire business. McCallum said the new program would be introduced to agents as the industry emerges from the COVID-19 pandemic.
STA Travel insolvent
The collapse of STA Travel last month marked the end of an era, with Caspar Urhammer, CEO of STA’s Swiss-based parent company, declaring insolvency which has seen the closure of its 27 stores across Australia, as well as 52 UK-based outlets. It was a sad end for the business which was founded in Melbourne in the late 1970s, growing out of what was formerly named Stewart Moffat Travel.
Locally administrators from Deloitte have been appointed to the Australian entity, and have advised customers they are “not currently in a position to honour any credit for cancelled trips”.
HLO rides the storm
Helloworld Travel Limited has reported a $70 million loss for the year to 30 June, but believes it is well positioned to flourish once the “perfect storm” of COVID-19 subsides. Heavy cost-cutting and the recent equity raising has given the company enough money for operating and capital expenditure beyond the end of 2022, even if international travel demand remains low.
A restructure of operations in New Zealand has seen staff numbers cut by 160, while the overall result was impacted by significant non-cash writedowns of the value of Helloworld’s wholesale and inbound operations as well as the book value of TravelEdge which the company purchased just last October for $22.7 million.
CEO Andrew Burnes said the last few months had been the most challenging period in the company’s history. However travel will return, he believes, noting “we are confident that when they can travel our customers will need the help of their travel professional more than ever”.
CATO’s radical plan
The Council of Australian Tour Operators last month unveiled a draft discussion paper for the future of the Australian travel industry, in the hope of sparking debate about how things could be reshaped in a post-COVID-19 world.
CATO is proposing that the AFTA Travel Accreditation Scheme be broadened beyond just travel agents, to become administered jointly by AFTA, CATO and CLIA, each of which would set accreditation standards for its own members.
The plan also postulates the creation of a ‘user pays’ consumer protection scheme, which would be funded by a levy on all bookings through ATAS Accredited Entities. This policy would be administered by ATAS in conjunction with an insurance provider, and endorsed by the Australian Competition and Consumer Commission.
CATO Chairman Dennis Bunnik said the plan would significantly broaden ATAS membership and bring many non-accredited businesses “into the fold” while the consumer protection levy would “encourage bookings through ATAS accredited businesses”. The draft received a lukewarm reception from AFTA which said the issues raised, on the eve of a major Budget submission, had already been the subject of long-term discussions with Government.
“AFTA continues to lobby on these highly sensitive matters…the chances of success are not elevated as a result of publicly airing these issues in this way,” was the terse response from AFTA Chairman Tom Manwaring.
Meanwhile CLIA acknowledged the report, but noted that as a global trade association it “may therefore be limited in its ability to become directly involved as suggested”.
Webjet joins AFTA!
Australian Federation of Travel Agents CEO Darren Rudd has firmly defended a decision to allow Webjet Limited to become a member of AFTA, after the move was widely criticised by members with memories of Webjet’s longstanding anti-agent TV commercials.
Rudd acknowledged the anger from across the industry, but said having Webjet as part of AFTA at this time was particularly significant, given the pressures on the industry due to COVID-19. “For governments to listen, you have to be big,” he told travelBulletin.
“Webjet is an influential and significant player in our sector and we welcome them as an AFTA member and ATAS-accredited agent at a time when industry unity and a combined voice is more important than it has ever been,” he said.
Rudd also confirmed the impact that the pandemic was having on AFTA itself, with the Federation taking the unprecedented step of reducing its office hours to a Monday to Wednesday three day week effective from this month. He noted that with fees waived, the “economic reality” was that costs needed to be cut to ensure the organisation survived the pandemic, with other measures including possibly relocating the AFTA office to cheaper premises.