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What now for independent operators and agents?

Our lunch this week brought together two of the very best independent tour operators. One is an owner, Chris Kirker of Kirker Holidays, who has created a very distinctive and distinguished company and product himself. The other is a manager, Gary David of Cadogan Holidays, who is a newer kid on the block and who is shaping and growing an existing brand very successfully.


But before I get directly to them, let me own up and say that some of my best friends are independent tour operators.


Sentences like that are, of course, nearly always followed by a ‘but’ and this is no exception. So here goes.


But, although some of my best friends are independent tour operators, and although there are some very fine companies within it – how can I put this without giving offence – they can seem to be at times, to some people, well, unprogressive.


This is a polite way of saying that many small operators believe that they are in some way superior to the mainstream, that there is something inherently good about being small, and that the ‘Big Boys’ will get their comeuppance one day.


There is a large body of them who worship in the kirk known as the Association of Independent Tour Operators, famed as much for the devils it hates as the saints that it praises.


Some of them, of course, think I am prejudiced, biased, even anti-religious, in my beliefs, and they may well be right.


But I needed to get that off my chest at the beginning, because Chris Kirker is one of my oldest friends and is not only a very good smaller operator, but chaired AITO for four of its best years. And, as we shall hear, he is less than keen on those devils, The Big Boys.


Our other guest, Gary David, I have known only recently. He is also a member of the group, but a reformer; indeed more than a reformer – he is setting up a little church of his own, the strangely named Truly Independent Professional Travel Organisation.


The case for CARTA


Recently, a small public tiff between TIPTO and AITO, or rather one of its internal groups, the Campaign for Real Travel Agents, brought to the surface once again the future of independent tour operators and the best way to survive in an increasingly heathen, commercial world.


CARTA grew out of a reforming idea that Chris had when he was chairman of AITO, and when it was still predominantly direct sell.


The oldAITO 100 Club brought together good independent agents and AITO members to work together on promotion, marketing and training.


CARTA, which is run within AITO, takes this a step further. It has about 300 travel agency outlets and 60 AITO companies representing about 110 brands.


There is a kitty to pay for promotion and monthly training sessions, into which agents pay £90 and operators pay on average £350, according to turnover.


It is a consumer-facing club. It offers no commercial deals between members.


It is also very pro-AITO.


Operators have to be members of AITO, which means you cannot be one of The Big Boys, and any AITO member can join.


Agents have to be independent – there’s no multiples here.


TIPTO’s grand plan


TIPTO’s aim is strictly commercial, or so it at first seems.


It was the brainchild of Gary David and held its inaugural meeting last week. The object is to put a very large war-chest together, to put reps on the road for TIPTO members, and to support them with training and marketing deals and anything else that will get members’ holidays sold.


Operators will be expected to pay up to £30,000 as marketing spend and agents will have to contribute too.


And that’s not the only difference. Firstly, only 20 or so operators will be let in, as Gary explained. “To make it work, we need operators with a minimum of 8,000-10,000 passengers, and our chosen operators must together cover the globe and all holiday types.”


It is also unlikely that single destination products or destinations will become members. He needs the biggest spread from the fewest participants.


So far, so commercial. But old habits die hard when it comes to agents. TIPTO is expecting in excess of 1,000 outlets, but The Big Boys won’t be there.


“Agents must show that their branch managers have full discretion in deciding what product gets sold to the customer,” said Gary. “They must not be governed by head office.”


But will, I wondered, Andrew Dickson of St Andrews Travel in Bolton, or a host of other good agencies, qualify? Do they really let their branch managers sell what they like, or rather not sell what they do not like?


Are there many good independents who do not have a racking policy, which their staff have to stick to? Indeed good agents should promote the good and not promote the not so good.


Gary has been inundated with requests for membership – he claimed more than 125 operators want to hear more and were planning to attend last week’s meeting to do just that.


By the end of June he expects to have everybody in place, both agents and operators.


But on the operator side, this will not be a democratic choice.


He already has eight or nine operators in mind and is already, with chums like John Harding at Travelscene, looking to fill the product portfolio gaps.


I expect the choice will be difficult, only because the choice will be huge.


It’s a very good scheme, and if run properly deserves to succeed, butÉ


My ‘but’ is that it still holds to the idea that independent is beautiful, even Gary’s definition of independent is perhaps wider than AITO’s and Chris Kirker’s.


But, in my view, if it is commercial, why doesn’t it simply sell the best portfolio of product, through the best agents?


Indeed TIPTO should want head offices to tell its branches to prefer their portfolio of brands.


What is it about this concept of independence, however it is defined, that makes it so important to these business people? Is it just me? Am I being religiously anti-independent for no goodreason?


Does independence really matter?


Chris makes a compelling commercial case for supporting independent agents. They can know his product better, they can target it better at the right customer, and he can be less easily switched off.


“I know several smaller operators who relied on multiples and who now fear that they will be taken off sale, with a huge impact on their business, because the in-house operator has acquired competitive products,” he said.


But the number of independent agents who won’t prefer certain operators because of commercial deals is inevitably getting smaller. The Airtours’ franchisees may still be claiming independence, but that noose will tighten.


And there will be fewer independent agents not owned or part owned by multiples, and of those left, increasingly fewer who do not tell their staff what to prefer.


Both Gary, through TIPTO, and Chris are, in their different ways, planning to work with an agency sector, where the number of good and productive agents who fit their definitions of independents are going to diminish.


They are also in a tour operating sector that is also likely to shed numbers. The independent operator sector, which is offering holidays to that so-called discerning market, is increasingly attractive to the majors.


It is a growing market, as the excellent results of both Kirker Holidays and Cadogan have themselves demonstrated. It has many owners who are looking, in their greying years, to sell-up. And, I think, they are quickly learning how to run those businesses within a much bigger set-up, although Chris is sceptical.


“There will be more acquisitions – at the recent Association of British Tour Operators to France Conference, the Selling your Business workshop was the best attended one. But the big companies cannot offer the same level of service or customer understanding that the independent owner can,” he said.


Gary also thinks there is much more consolidation to come, but does not see the majors allowing a Simply Travel or a Cresta to lose its marketplace through ‘big business-isation’.


And nor do I. The young entrepreneurs like Andrew Windsor at Thomas Cook, Peter Shanks at Going Places, Richard Carrick at Airtours and Shaun Powell at Thomson are a different generation, a different breed, with very different trading goals from their predecessors. We are coming out of the monolithic, single-brand model, which said “Unless I can sell 100,000 of them I am not interested.”


The opportunities for independents


Peter Chappelow, managing director of Thomson’s Independent Holidays Group, who now has Simply Travel and Magic Travel group under his wing, was not put there to turn those products into Thomson look-alikes.


If I was an independent, I would first of all stop calling myself ‘independent’ – I am now un-aligned; and then I would be knocking on Thomas Cook’s door and asking which 50 branches best matched my customer profile and get a deal and train them up.


They, like all the Big Boys, need new product as much as independents need good outlets.


There is a unique opportunity again in the industry, where the ever-quickening integration that is going on and which seems to promise increased exclusivity, is actually opening the doors, especially for the non-aligned agents and operators, to start trading together again.


Lunn Poly, without First Choice, needs more non-aligned product not less. If Going Places won’t sell Simply Travel, look at the opportunity there is for all those AITO members who do sell a similar product.


Chris Kirker and Thomas Cook are natural bed-fellows – great product expertly run by very good people – both of them.


Gary David is a dynamic younger manager who is on the edge of a potentially great commercial leap forward – it is a leap to which he would add great distance if he didn’t still carry some old baggage.


All the public wants is good product, which is on sale where it wants to shop. A few zealots demand the pure world of the independent, but most don’t know and perhaps don’t care. If shop A gives it better service it will go there – who owns it isn’t the issue.


It will still buy Kuoni in droves, whether it is independent, multinational, or eventually part of Disney.


It is time to move on. It is time to forget about old definitions, old ways of doing business, old religious divides.


Of course, Chris will not agree with much of this and Gary with perhaps only some. They may be right.


Name: Gary David.


Age: 37


Title: managing director, Cadogan Holidays and founder of the Truly Independent Professional Travel Organisation.


Career history:


Joined Peltours Travel as a junior in 1979 and promoted to branch manager in 1980.


Became branch manager of Meadows Travel in 1983 and then managing director of Tinos Travel in 1985.


Was appointed MD of Speedwing Holidays in 1987 and then MD of Cadogan Holidays in 1990.


Name: Chris Kirker.


Age: 49.


Title: Kirker Holidays founder and managing director and Campaign for Real Travel Agents founder and chairman.


Career history:


After graduating from Cambridge in 1972, he joined Clarksons and worked as assistant brand manager.


Following the collapse in 1974 he became sales manager at Inghams and joined Global in 1978 as sales and marketing director.


In 1982 he joined Travelscene as commercial director, where he had his first experience in the city-breaks market.


In 1986 he left Travelscene to form Kirker Holidays and launched the first Kirker brochure later that year.

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