Queenstown takeover
Queenstown takeover

Keep Calm – 2015 is around the corner

Ebola, the dropping dollar, ATAS, AFTA, insurance and the kitchen sink. The issues of 2014 and what they mean for 2015.

Ebola, the dropping dollar, ATAS, AFTA, insurance and the kitchen sink. The issues of 2014 and what they mean for 2015.

In July 2013 at roomsXML we began strategizing for 2014. It was early, but 2014 was a year that could change a lot.

Every year there are “unknowns” we would react to but we had definitive “known unknowns” to think about. Why look at 2014 before it’s over?  It’s a good chance to consider change and implement changes to make a difference for 2015. Here’s what we saw coming, what happened and what matters for 2015.

1. TCF, ATAS, AFTA and all that

AFTA_KarryOn

Late 2013, it seemed people didn’t care or AFTA was the devil incarnate. The sky was going to fall in, travel would end as we know it. Customers were not going to be covered….. but let’s face it, the TCF was written pre Internet. It would be like trying to write a book in 1984 about social media. So the truth was always going to be not a whole lot would change. Kinda. Not really tested yet.

The effect?  It really, really p’d a lot of agents and bosses off.  They were going to lose TCF deposits. They rightfully felt they had lost a weapon in their armoury against OTA’s. The travel media bullocked anyone who questioned the direction of the change. That annoyed me.  Media should report and not take sides. It made for grumpy agents, grumpy staff and challenging meetings.

AFTA 2015: lots signed up for ATAS. None of the key AFTA staff members have been poached or bailed (yet) so the team is strong, mature and known in the industry. Their move to partner the 2015 travel expo in Sydney was a good one and their job is going to be more positive, proactive  and underpin a more positive sentiment throughout the industry.

2. The helloworld behemoth is born

helloworld_KarryOn

Recipe: take 5 well known retail brands, 5 or 10 smaller ones, pop on the blender and homogenise. Offer 3 different sauces including natural, same-same-but-different and “rebel yells” . Serve to the market and take on the might of the red and white army.

Same effect as TCF; agents drew battlelines. Some ran off to get the new helloworld tattoo’s and pray at the JTG altar, for them it was good.  Others were kinda happy to go along with the ride whilst others wanted the benefits but not the brand. It made for ugly meetings. Agents told me “oh, we didn’t read the contract, we just signed it.” It REALLY opened the door for iTravel and iTalk Travel as well as ATAC and Magellan increasing member numbers quickly.

Successful?  Bitch of a year really to launch a new brand.  Flight Centre have gone HARD on the marketing.  Booming growth.  Aussie dollar shat considerably and self-book domestic travel is looking shiny. The introduction of new wholesalers internally has meant tough competition in head offices whilst agents grapple with needing to meet 85% targets of using preferred’s.

Will lack of choice hurt the agents?  Can helloworld claw back and fight back on red and white?

That’s the story for 2015.

3. Insurance

glow_Gates_KarryOn

Before anybody at Gow Gates had issued a policy there were high cost expectations.  The outspoken, champion of the home agent, Barry Mayo, voiced concerns about consumer protection and for me…why can’t more than one company give us a quote? Small agencies turning over $7M a year allegedly were quoted $10,000 to $15,000 per year.  Not feasible.

Then it got interesting. A brochure was released which seem to imply a whole stack of wholesalers already had insolvency insurance, which was not the case.  AFTA had a chat. There was confusion over the source of the list. Wholesalers not on the list got very, very grumpy. The great irony is that potentially, this insurance if implemented broadly with all wholesalers having equal ability to be on the list could in fact solve many of the issues for agents and travellers.

So expect in 2015 some clear, common sense and affordable options for travellers

4. The unknown unknowns

Australian_dollar_drop_KarryOn

The dropping Aussie dollar and Ebola, in that order for impact on Aussie agents. The dollar shat by about 10%.  Agents who booked on variable pricing or rates in August and went to pay in September had their commission wiped out.  That’s work for nothing.   People will travel for a bit, for shorter time periods, but talk of the domestic industry is picking up.  Not good for agents as mostly, that’s self booked.

Ebola is still a bit unknown, is still a huge fear story and the impact largely not felt. Expect the stories to stay as fear sells lots of advertising space. In the states where people have come home crook up to 40% of people have cancelled or delayed travel plans anywhere.  African tourism is dying, but that’s not massive yet for Aussie’s. The 2015 effect will be it hits anywhere like Singapore, Dubai, Mumbai or Bangkok, then the real fear will kick in. That’s a known unknown.

5. So where does that all leave 2015 plans?

Just think, just prepare.  Have options open.  Get your niche and USP clear and play to your strengths.  Minimise risks, lock in costs, forecast on what you can forecast, know your profits and exposure. It will be better, it will be more positive, 2015 will be a year for moving forwards. Fortune will favour the brave. But most of all, let YOUR customers know to; “Keep Calm; leave it to the travel agent.”

What do you think 2015 looks like for the agent landscape?