AFTA View

Travel Bulletin - - CONTENTS -

MANY travel re­tail­ers spot­ted an op­por­tu­nity to ex­pand when Hel­loworld stum­bled onto the stage back in 2013. As the brand made its first ten­ta­tive steps, com­peti­tors looked to cap­i­talise on ris­ing dis­en­chant­ment as Har­vey World Travel, Jet­set, Trav­el­world and Trav­elscene Amer­i­can Ex­press were con­signed to the scrap heap. The re­sult was a raft of re­cruit­ment drives as groups courted wa­ver­ing agen­cies, all pon­der­ing their fu­ture. Since then, many have made their call, elect­ing to em­brace the new era or opt­ing to cut and run. Which is why I find it cu­ri­ous that North Amer­ica-based Ensem­ble be­lieves the time is now right to launch in Aus­tralia. If a lo­cal op­er­a­tion for Ensem­ble has been in the pipeline for three years as Aus­tralia and New Zealand vice pres­i­dent Tr­ish Shep­herd sug­gests was the case, why did it not launch ear­lier when a greater num­ber of JTG agents were at their most mal­leable. Has Ensem­ble not missed the boat? Ex­plain­ing the rea­sons be­hind the launch, Shep­herd cited the in­dus­try’s rapid pe­riod of change, with many agents con­sid­er­ing their op­tions in light of the Hel­loworld con­sol­i­da­tion. That was cer­tainly the case, but is less so now. Eigh­teen months have passed since Hel­loworld’s launch and many re­tail­ers have ei­ther stuck with Hel­loworld or been se­duced with prom­ises of riches by ri­val groups. Trav­ellers Choice, itravel and Es­cape Travel all picked up dis­af­fected for­mer JTG agents amid the up­heaval. Of course there are some who con­tinue to pon­der which di­rec­tion to take, but the pool of po­ten­tial mem­bers for Ensem­ble has di­min­ished. In ad­di­tion, is there re­ally room, or a need, for another travel agency group in Aus­tralia? Ac­cord­ing to Shep­herd, Ensem­ble is in talks with an “ex­ten­sive list” of agents, and more have ex­pressed an in­ter­est. You wouldn’t ex­pect her to say any­thing else. But aside from the ‘big two’ of Flight Cen­tre and Hel­loworld, there are sev­eral well es­tab­lished bricks and mor­tar groups cater­ing for a broad cross sec­tion of agents, while the home work­ing net­works are grow­ing forces.

Is there room for another Aus­tralia?’ travel group in

And I can’t imag­ine whole­salers will be do­ing cart­wheels over the thought of ser­vic­ing another group of agents. To achieve the buy­ing power which Ensem­ble re­quires will need crit­i­cal mass in terms of agency num­bers and turnover. Shep­herd sug­gests that will hap­pen “quickly”. She may be right, but I can’t help think­ing it won’t be quite so straight­for­ward. It could also be tough go­ing for the in­dus­try as a whole in 2015 judg­ing from Flight Cen­tre’s profit down­grade shortly be­fore Christ­mas. The re­tailer said travel spend­ing slowed in the first five months of the fi­nan­cial year in what was a wor­ry­ing sign for the rest of the sec­tor. Trad­ing con­di­tions are “chal­leng­ing”, Flight Cen­tre re­vealed. While that may be put down to eco­nomic con­di­tions, I can’t help think­ing that travel and tourism will also be im­pacted by world events. Travel has been re­mark­ably re­silient in re­cent years but events in Paris – and in Syd­ney with the hostage tragedy – seem to have cre­ated a wave of para­noia I have not seen be­fore. And the spate of air dis­as­ters over the past few months will not have helped public con­fi­dence. Travel could be in for bumpy year.

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