Steve Jones

It is often noted how travel is exposed to the vagaries of world events. Terrorism, economic conditions, political instability, natural disasters and exchange rates all have the ability to dampen demand, and from a shareholders point of view they can also hit the bottom line. Yet even a cursory analysis of the recent performance of the travel sector shows maybe our hand wringing is misplaced. There will always be challenges and the issues are real. But what the results have illustrated is not only our almost insatiable desire to travel – we might get spooked for a day or two but the nervousness rarely lingers – but how travel firms have, by and large, coped and adapted during these times of unprecedented uncertainty. There have been bumps in the road, but most have enjoyed a positive year. One such bump was encountered, perhaps unexpectedly, by Flight Centre, the industry’s money-making machine which reported profit dipping almost 6% to $345m. Yet according to MD Graham Turner, that was not so much the result of poor trading conditions, or sales hit by world events, but down to rock bottom airfares. There is, to put it simply, an oversupply of seats which is putting downward pressure on fares. Great for travellers, not so for margins - although on the flip side cheap deals do stimulate the market. Over at Helloworld, Andrew and Cinzia Burnes seem to be getting the business into reasonable shape. One issue addressed by Burnes has been senior level salary with a “realignment of executive remuneration to more appropriate levels” - meaning “pay cut” to you and me. I thought that was an important statement of intent. You need to pay top dollar for top executive talent, but there’s a balance. And in recent years the business lost sight of that by paying exorbitant sums despite the business stumbling along - resulting in disharmony in the ranks. The industry’s other bricks and mortar retail networks have also fared well. Magellan continues to prosper, as does Travellers Choice, which reported another record profit. In such a competitive environment, that is no mean feat and testament to the management teams which have instilled a sense of togetherness in their respective networks. Webjet, every agents’ favourite OTA, has continued to grow, and done so – as we all know – while having a dig at its bricks and mortar counterparts. On that, those TV ads are just appalling. Excruciatingly pompous and unbearably sanctimonious. But, as I’ve said before, agents have hardly been shy to put the boot in to OTAS over the years, and continue to do so, and they can’t have it both ways. What is clear in the retail sector is that there’s room for everyone. It would be wrong to suggest it’s all sunshine and roses, and challenging times remain. But all things considered, the retail landscape is in pretty good shape.