Comment: New Venture is test for consortia model

Comment: New Venture is test for consortia model

When Midcounties and Barrhead announced their Venture partnership to create one of the largest buying groups in the UK this week and plans to leave Advantage, several people at the ITT Conference in Abu Dhabi, where the news broke, said it spelled “the end of the old consortium model”.

Certainly, it would suggest that if you’re as big a company as Barrhead or Midcounties, you reach a critical mass where you don’t need to belong to a bigger group anymore.

But not every independent agency group is like Midcounties, which had a ready-made commercial team that had previously worked at arguably the biggest buying group, CTTG.

So, for smaller independents – or even bigger ones without Midcounties’ expertise – the consortium model can still add value.

At Advantage, the majority of commercial deals were negotiated excluding of the likes of Barrhead anyway, since it often agreed its own terms. So current commission rates are unlikely to be affected by the loss of two big members.

Furthermore, Advantage leisure director Julia Lo Bue-Said said commercial deals were just one part of what a consortium offers and the time now spent helping members with aspects such as business plans, bonding, insurance, analytics and marketing was increasing every day.

Consortia will continue to play a key role but, that said, the argument that Venture, the new buying group, offers more-focused distribution through owned shops carries some weight.

It will be interesting to see what the Barrhead/Midcounties partnership manages to deliver for its suppliers and whether that forces any more changes from the traditional consortia

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