Stella Travel Services chief executive Keith Stanley talks to Juliet Dennis about franchising, the benefits of joining a consortium and the company’s rumoured plans to buy Advantage
Keith Stanley’s job was already big, but with Stella Travel Services’ acquisition of Global Travel Group in the UK at the end of last year, it got a lot bigger very quickly.
Stella now has 736 travel agencies in the UK. But even with speculation rife that his job could become even bigger with the rumoured buyout of Advantage’s head office, Stanley is remarkably relaxed.
If nothing else, he has plenty of experience of high-street retailing, with 15 years at rival company Flight Centre under his belt and more than a year at the helm of the rapidly expanding Stella, which already boasts 3,000 franchise members across 13 countries.
Speculation has increased recently that Stella plans to acquire Advantage. Is this true?
I am happy to say we are working more closely with the Advantage consortium to look at meeting its product needs. [Advantage chief executive] John McEwan is keen to see how Advantage can work with Stella.
We have been talking to him about this since before the Triton conference. He is an accomplished leader and is clear about what he wants – we are looking at how we can help him. But we are not buying Advantage at the moment. I would love to do it, but we are trying to work out a broader product arrangement.
Is Stella Travel looking at acquisitions in general?
We have a new private equity owner in CVC Asia Pacific and it is looking to float us or do something with us in three to seven years, so the higher our value the more it gains.
If there are acquisitions that fit our strategic plan and are available to us, we are happy to take their call – but we are not actively looking. Strategically, we want to be in product specialisation, both on a mass market and niche basis; and in distribution.
In the UK we have plenty of businesses now and we are focused more on them rather than the whole ‘testosterone’ value of how big we are. It’s really about franchisees and suppliers’ relationships.
How does the Stella group model work?
We are franchise specialists. The majority of our investment is in the high street. Although the web has grown astronomically, customers prefer to talk to human beings. If you look at the percentage of business online within the travel industry, it’s not the largest share.
The high street has a lot of value. We believe in the franchise model because it brings in entrepreneurs who have invested in their own businesses. Their different expertise adds enormous value. They are also independent and the service they give is often better what call centres offer.
How does Stella manage agent-supplier relationships?
We always listen carefully to what our members are telling us. Once we have listened we try to contract the best deal for them and make it as easy as possible to book.
Obviously, if we negotiate a reasonable deal with a supplier there is a financial benefit for the member to book that supplier. If we can use our group purchasing power then it’s a real benefit to the individual shops.
We look at every partnership to see if we can add value to it. It comes back to looking at where the bulk of their business is and whether we can aggregate it across the agents and negotiate a deal that works for all parties.
For suppliers it means they have one point of contact. It’s a synergistic relationship between the front-end consultant and the supplier which is trying to make a few quid.
How do you plan to turn existing UK agencies into franchisees?
All of our agencies [worldwide] are franchisees or members. Franchises have full branding, where you have a business model and work with them in a collaborative way.
In the UK we have to find the right franchisees and we will talk to Harvey World Travel managers that are interested. It will take a couple of years to get to that and we want to do it when the time is right.
The benefits of the franchise model depend on what partners are looking for – some want a buying group arrangement so we have a model for that, some want a fully branded structure like McDonald’s and Burger King. It’s about what suits the individual.
From an agent’s point of view what are the benefits of being part of Stella?
We are a vast company and offer a business analysis service so members can learn how to run their businesses better. We have excellent marketing and branding that drives business, particularly with the Harvey World Travel brand. We have brand development managers that assist people through the changes.
It’s no different from any other franchise group. Put very simply, if all the members and people buying through us are aligned through buying patterns, we will be able to return more remuneration to members because suppliers are happy to remunerate that.
What are you priorities for the business?
I live in today and I am focused on what I can do today. I am keen to leverage the assets we have. I have been given a great opportunity to leverage acquisitions around the world and use my experience from Flight Centre, where I worked for 15 years, to add value.
What is your view of Worldchoice, given the consortium has decided to partner with rival Travel Trust Association instead of Stella-owned Global Travel Group?
The Worldchoice brand and its members made a decision they felt was right for them and we have always respected this. We think we would have added the best value to their group in the marketplace but sometimes people see something else they like more. The TTA has a very different structure.
We intend to work with the TTA and Worldchoice – we want to continue to manage the partnership we have. We hadn’t actually made an offer to Worldchoice; it was more a case that one was well under way with Global at the time.
Profile
- Lives: Sydney, Australia
- Age: 51
Employment history
- 1977-1980: Worked as a management trainee for Harrods.
- June-November 1980: Worked in marketing for Argos Distribution.
- 1980-1986 and 1988-1991: Enjoyed a management career at IKEA.
- 1991-2006: Worked for Flight Centre for 15 years looking after global marketing and distribution. It was while running his own consultancy Retail Detail that Stanley was introduced to Flight Centre to help with its brand image. Flight Centre then bought his business.
