Travel Counsellors' chairman David Speakman says taking on suppliers is 'the way forward'. Hollie-Rae Merrick reports from a Travel Weekly Business Breakfast
Travel Counsellors insists it has no qualms about cutting out tour operators if it ensures the business has a vibrant future and its agents earn better margins.
David Speakman, founder and chairman of the Bolton-based travel agency, said the decision to take on more of a tour operator role was “just business” and was “the way forward” – and the future for all agents.
He said there were two camps in selling travel – those firms that are “super-relational” and those that are “super-transactional like Expedia”.
He said those in the middle would struggle and should “forget about it”.Asked about the company’s annual conference where operators are charged to exhibit, Speakman said mainstream operators and those
“without anything to bring to the table” increasingly choose not to attend.
The mix of exhibitors has shifted more towards those that own the product, such as hoteliers and destinations, while agents are encouraged to use the firm’s Phenix selling system to tailor‑make their own trips.
“I’m not frightened of doing that [cutting out operators],” Speakman said. “I’m not a moaning travel agent, but these [tour operators] are the people who also want to disintermediate against us.
“It’s just business and I’ll run mine how I see fit and they’ll run theirs how they see fit. I have no problems with it. The emphasis has definitely changed.”
Speakman claimed independent agents that had become used to selling tailor-made packages would continue to do well in the future.
But he warned that agents working at the likes of Thomas Cook, which mainly sell their own-brand or third-party packages, would struggle to adapt.
Speakman recalled how direct-selling by operators had prompted Travel Counsellors in 2005 to introduce an internal selling system so that it could “protect the business and our livelihoods”.
Phenix, which allows agents to combine components to build unique packages, meant staff could successfully boost and control their own margins, Speakman said.
“Years and years ago in a travel agency, we used to do tailor-made. We used to take the details, we’d tailor-make it but we’d phone Kuoni, Gold Medal or Travel 2, and they’d find you their best fit and give it back to you. You’d get 10% or 11% and then they’d make 10% or 15%.
“Then the dynamic in the industry changed and more operators started going direct, so therefore you have a problem because you know your margins are going to go down because you’re going to lose business and you’re going to find they don’t need you as much.
“That is why we built our own system and we built software that allows us to compile component parts with margins our Travel Counsellors feel comfortable with, and they sell it to the customer.”
Speakman said he believed you either “own the customer or the product”, and that Travel Counsellors had the greatest opportunity to own the customer because its agents created an “emotional attachment” with their clients.
“We have an opportunity as a tour operator,” he said. “We can utilise the knowledge we have with 1,300 people [Travel Counsellors’ home-based agents] around the world working together. Put it all together and it’s increased our margins from about 9.9% to 12.5%.”
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