Analysis
INDEPENDENToperators who have watched wave after wave of travel industry mergers and takeovers with growing anxiety over the past few years turned out in droves to discuss their own future last week.
Around 160 people, including more than 100 tour operator representatives, showed up at the Carlton Hyatt Hotel in London to hear what the new Truly Independent Professional Travel Organisation could offer them.
“The attendance was fabulous, because we are all obviously worried about the future,” said TIPTO founder and Cadogan Holidays managing director Gary David.
He decided to set up the group to protect and expand independent operators’ distribution through independent agents, to make up for the loss of sales opportunities through the multiples in the wake of industry consolidation and the rise of directional selling.
Or as Travelscene sales director John Harding put it: “Now the frenetic takeover and acquisition game of musical chairs has slowed it’s time for those left in the middle without seats to decide how they wish to proceed.”
Most operators attending the TIPTO meeting were cagey about whether they thought it would be the answer to their distribution problems. But they all wanted to know more about David’s plans and find out how their competitors were to get involved.
TIPTO, which is due to be launched on August 1, will be a marketing consortium of 20 like-minded operators, competing in different market sectors, who together will target 1,000 carefully selected independent agencies. Participation will cost £25,000 a year apiece, creating a pot of £500,000.
Operators did not waste much time airing complaints about greedy multiples. Instead, they asked a series of searching, common-sense questions about how TIPTO would work in practice – and it soon became clear there are many details that need ironing out.
Many of operators’ concerns centred on the way TIPTO members would be chosen. How can you find 20 operators that don’t compete directly against each other? And who will be in charge of choosing them?
It remains to be seen whether the first question can be answered – we won’t know until after the selection process. This will be carried out by David, who will have the final say on membership. However, he will be seeking the advice of a group of fellow operators who will “emerge” around him. Harding seems likely to be one of them.
Another thorny issue is how TIPTO will interact with independent agencies. Sue Foxhall, chief executive of Midconsort, pointed out that her agency members might have agreements with some TIPTO members, but also with the direct competitors of other members.
Strong TIPTO supporter Andrew Dickson, of St Andrews Travel in Bolton, acknowledged this might be a problem. “TIPTO members will waste their time coming into my agency if I don’t have an agreement with them,” he said.
Nevertheless, independent agents are crying out for a more supportive relationship with operators, according to a survey of 1,000 of them carried out for TIPTO.
Everyone said they would attend TIPTOworkshops and roadshows, and 94% would welcome training on TIPTO tour operators’ products. Meanwhile, 80% said they rarely received visits from tour operator representatives at present, and 77% said they were rarely invited to roadshows and seminars. A massive 95% claimed they didn’t receive adequate brochure supplies.
TIPTO is a unique venture in the travel industry, with plans and objectives that will not suit every independent operator. Even if it did, membership is barred to all but a “like-minded” few. Somehow, those left outside TIPTO will have to find their own solutions to the distribution problems.