As Elite chairman Wayne Darrock freely admits, when the group decided to become an Advantage member in 2008, many commentators felt the writing was on the wall for the Midlands-based consortium.
But as the two organisations prepare to celebrate their fifth anniversary together this autumn, both insist it is a relationship with a long-term future.
“A lot of people thought that it would be the end of Elite within 12 months, but the agreement was always about retaining our identity while strengthening our commercial stance,” he said.
“Advantage is much larger, but we share the same philosophy and are both solely owned and operate for the benefit of our members.”
Julia Lo Bue-Said, Advantage leisure director, agreed. “We are the only true membership organisations left and that brings benefits beyond just commercials.
“Advantage and Elite agents benefit from services we provide around marketing, payment terms and processes, legal and HR advice, bonding, insurance and technology, so it goes well beyond just buying power.”
Bue-Said and Darrock were speaking ahead of the Midlands Travel Trade Ball just two weeks after two of Advantage’s biggest members, Barrhead Travel and Midcounties Co-operative, announced plans to break away and form their own buying group.
But Bue-Said was bullish about the future: “We are still in talks with Barrhead about whether it will remain as a member in some form, but the fact remains that it did its own commercial deals so the effect on that front is minimal,” she insisted.
“Midcounties was always going to be a short-term membership while it set up its own structures. Advantage is a £3.5 billion gross turnover group, of which Barrhead accounts for £150 £160 million and Midcounties was not in that ballpark. We are still in a very strong position.”
The breakaway reflects a broader challenge facing both Elite and Advantage as suppliers review commission or look at cherry-picking top-selling agents.
For Bue-Said and Darrock, these sorts of exclusive deals are often short-sighted for both the operator and the agents who break ranks. “They aren’t seeing the big picture,” said Darrock. “The agent needs to realise that the whole concept of consortia is that the group will always be bigger than the individual.
“For the operators, it is not always cost-effective to individually account-manage those they choose to give preferential treatment to, and in tough times the group will prefer to support those operators who’ve shown support in the past.”
Bue-Said said: “If you look at what happened with cruise [Advantage stopped selling Norwegian when it reduced commission], there is real strength when the combined power of the group can be relied on.”
For both Advantage and Elite, recruitment is a consideration, but both claim to be happy with their current membership levels.
Bue-Said added: “We are seeing real growth in our managed services offering, so that is where we are focusing most of our attention.”
And Darrock added: “Our membership is 79 and we’ve had two members join this year. We are happy where we are and within Advantage. The cultures fit and the relationship continues to be based on mutual respect.”
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