Card fees and Monarch collapse topped the agenda. Lee Hayhurst reports from Marbella
Hays IG hails the high street as profits rise 20% this year
Double-digit growth in sales and profits for the Hays Travel Independence Group consortium is being driven by sustained improvement in trading among high street members. Like-for-like profits at the group have increased by 35% over the past two years.
That figure includes a 20% increase this year on the back of a 13% rise in passenger numbers and 19% increase in sales.
Net commission earned this year is 23.4% up on 2016.
The performance follows Hays IG’s most successful year to date in 2016. The group has set a target of a further 20% increase in profits for 2018.
Across the group, short-haul passenger numbers are up 9% this year, sales up 15% and profits up 17%, while long-haul passengers are up 5%, sales up 15% and profits up 18%.
In cruise the figures are even more impressive, with passenger numbers up 21%, sales up 26% and profits up 29%.
Claire Gibson, Hays commercial manager, said: “We are over the moon with these figures; it’s amazing and it’s very strong.”
For the market as a whole, official GfK figures show summer 2017 was up 7% and packages up 8%, while winter 2017-18 is up 6% overall and 8% for packages.
Gibson said a number of factors were behind the improved performance although some destinations such as Turkey failed to pick up until a competitive lates market. However, she said the package sector had outperformed the overall market.
John Hays, managing director of Hays Travel, said the group’s figures were reflected across the board in high street agents and for homeworkers.
The only part of the business that had seen a challenge were IG call centre members, which are in competition with online retailers.
Hays said: “People increasingly want choice and independence.
“We are trusted to give independent advice and we are of a size where we are price‑competitive as well.”
Abta moots incentives as way to beat card fees ban
Abta plans to issue guidance to agents about what incentives they can offer customers to encourage non-card payments ahead of the ban on credit card and debit card charges on January 13.
Simon Bunce, the association’s head of legal affairs, told the Hays Travel Independence Group Conference that this was the most pressing regulatory change facing the industry.
He said the outlawing of payment card charges hit agents particularly hard because of the high transaction value of what they sell and because they do not control the price and cannot absorb bank fees in the way that operators can.
Bunce said the most promising potential way to avoid banking fees was to offer customers non‑cash incentives to pay in ways other than with cards such as by cash or bank transfer.
Incentives, he suggested, might be access to an airport lounge or vouchers for future holiday sales.
Bunce said: “We are in discussions with the Treasury to get this clarified. Although you can’t charge someone [who pays by card], to prevent them from using a card there are ways you might incentivise them to pay in different ways.
“The Treasury seems to be comfortable with that. We will be coming out with advice on this.”
Bunce added: “We want to be able to come out with clear guidance before members do something that’s too close to what will be a banned practice.
“The other thing we are talking about are costs in that payment chain. The intention was to bring down the interchange [bank] fees. That’s not worked.
“We have had quite a good response from the Treasury. They are very keen to see what impact there is on business of those [payment] costs and interchange fees.
“Also, we are stressing the impact [of the fees ban] on smaller businesses. This is something that’s having a disproportionate effect on smaller businesses.
“We are getting a good response. Hopefully we will see something coming through.
“If you can bring down the costs in that process, then that brings down the burden on you as retailers selling to the consumer.”
The new rules apply to all sales to customers in the EU and both the card issuer and merchant acquirer have to be based in the EU.
Firms with merchant acquirers outside of the EU can still charge fees but Bunce said that would be “hard to maintain” in a market where others aren’t charging.
Island Travel extols ‘old-school service’
Personal service and social media are critical to success, according to a new member of the Independence Group.
Island Travel, based in the Isle of Man, was set up by former Thomas Cook branch manager Rikki Dunnage and colleague Edward Cox in 2013.
Dunnage said sticking to “old school” high street retail values was key.
“Everything was going very much online with Cook,” said Dunnage. “It was getting less and less personal and that’s not what we are about.
“We thought we could bring back that level of service, pretty much old-school values.”
Business partner Cox added: “You don’t buy from companies, you buy from people. Thomas Cook was changing and we felt we could do it better. We believe we have.”
Dunnage said social media “has been massive” for Island Travel, with 40% of business being generated on Facebook.
He said: “I’ve been in the industry for years and you just learn to adapt. We all have to take head on whatever challenges come at us.”
Members urges to store data in new CRM system
Hays Travel urged IG members to use a new customer relationship management system (CRM) to securely store customer information.
Hays has implemented a bespoke ‘Know Your Customer’ CRM in Traveltek’s iSell system.
Jane Schumm, Hays retail and training director, said with new data rules coming in next year, now was the time for agents to use the system.
“It helps you profile your customers to give them a personal service,” she said.
“We think it’s unique to us. Nobody else has this; it’s a competitive advantage.”
Schumm said agents who take notes about clients on paper are responsible for keeping that information secure, but if they load details in iSell, Hays Travel is responsible.
The system integrates Feefo product and service ratings and also allows agents to view the buying history of customers including for extras such as add-ons and forex.
Direct marketing emails sent to clients can be reviewed, while an ‘Agent’s Notes’ section allows any information to be added that might help clinch a sale in the future.
The system was launched to Hays Travel agents last year before being rolled out to IG members. The firm’s Jarrow branch has seen conversion levels increase from 66% to 75% since bringing it in.
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