So who saw that com­ing?

Travel Bulletin - - ISUES & TRENDS -

Heloworld ’s ac­qui­si­tion of 50% of Mo­bile Travel Agents took many by sur­prise. Sure, An­drew Burnes ap­pears to be get­ting the busi­ness into bet­ter shape af­ter years of up­heaval and ne­glect, but hit­ting the ac­qui­si­tion trail was some­what un­ex­pected. The deal to buy 50% of MTA for $14m, money pro­vided via a $30m cap­i­tal rais­ing, will see Hel­loworld en­ter the home-based market, widely re­garded as a growth sec­tor of travel re­tail­ing. But was it a shrewd in­vest­ment? There is no rea­son to sug­gest oth­er­wise. MTA fi­nan­cials cer­tainly look strong. To­tal trans­ac­tional value has risen from $103m in 2013 to al­most $170m this year, with gross profit up from $5m to $8.5m over the same pe­riod. While the rate of earn­ings growth did slow from 35% to 25% over the past year – still very healthy growth it should be said – MTA is clearly in ro­bust shape. That in no small part is down to its own­ers, Roy and Karen Mer­ricks, who have spent the best part of 25 years build­ing the home-based net­work into what it is to­day. They have been re­spon­si­ble for both its growth and its cul­ture. And home-grown, fam­ily-owned busi­nesses have a cul­ture of their own, which is why it was so im­por­tant the Mer­ricks re­mained at the MTA helm. That may change in five years should Hel­loworld ex­er­cise its op­tion to ac­quire the re­main­ing 50% of MTA. But for now, the Mer­ricks, and chief ex­ec­u­tive Don Beat­tie, con­tinue to run the ship, and for that, MTA’S 350 mem­bers will be re­lieved. In the same way foot­ballers ‘run through walls’ for a coach they re­spect, so in busi­ness staff pull out the stops if they be­lieve in the man­age­ment and the strat­egy. The im­por­tance of the Mer­ricks to MTA and its mem­bers is not meant as a crit­i­cism of Hel­loworld man­age­ment, or their abil­ity to grow the net­work. But over the years, I have cov­ered the ac­qui­si­tion of many in­de­pen­dent and fam­ily-run busi­nesses which, de­spite protes­ta­tions that it would not hap­pen, lost their en­tre­pre­neur­ial spirit and cul­ture the mo­ment the founders de­parted. Busi­ness own­ers can of­ten be the heart­beat of an or­gan­i­sa­tion, so lock­ing them in for as long as pos­si­ble af­ter an ac­qui­si­tion is of­ten crit­i­cally im­por­tant. For Hel­loworld, the MTA deal was one of a series of in­ter­est­ing de­vel­op­ments. Key to restor­ing sta­bil­ity and gen­er­at­ing con­fi­dence at Hel­loworld has been re­con­nect­ing with agents and bring­ing them along for the ride. And not­with­stand­ing the re­cent loss of Bic­ton Travel, Burnes has achieved that through a canny of­fer to make ev­ery Hel­loworld fran­chisee a share­holder. Peo­ple want to feel part of some­thing, no mat­ter what it is, so giv­ing agents ‘skin in the game’ was an as­tute move.

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