WITH the Association of Independent Tour Operators meeting this week to debate the new membership criteria proposed by its council, Thomson’s acquisition of Simply Travel could not have been more timely.
For many within AITO, Simply Travel embodies the very essence of an AITOmember – a quality tour operator which has gained an impeccable reputation among the trade and public.
Simply, along with newly acquired Headwater, another AITOoperator, is the latest company to be snapped up by the big boys. Last year Airtours acquired Panorama, another high-profile AITOcompany headed by Justin Fleming, and Thomson bought Magic Travel Group.
While the likes of Fleming accepted his company would have to relinquish AITOmembership, Simply’s former owner and chairman Graham Simpson did not.
At a closed meeting of the association last year, Simpson argued that AITOcompanies keen to sell their businesses should be allowed to remain a member of AITO if they meet certain criteria. He is keen to stay a member of the association he has been a part of for the past 12 years but is resigned to the fact he will have to leave.
“I feel sad to leave an organisation held in such high esteem and which has championed the cause of quality.”
Simpson has pledged that the company will operate independently from Thomson and continue to use a mix of charter airlines, negotiate its own commission levels and not sell through the multiples. Some 23% of its business comes via independent agents.
AITO chairman Paul Chandler conducted a straw poll among members following Thomson’s acquisition of Simply to gauge reaction.He said: “I realised the only hope was for Simply to reapply for membership.”
Ironically, the new membership criteria, due to be discussed at the general meeting, will now allow Simply to re-apply. Operators will have to prove that their ownership links do not give them a commercial advantage. The current rules state it could not remain a member if more than 27% of the company is owned by another.
While Chandler is happy for Simply Travel to reapply for membership, he is sceptical that in two years’ time it will still fulfil the new criteria.
To rejoin, Simply would have to relinquish the benefits which come with being part of a large company and Chandler thinks this is unlikely. He cites the example of Time Off, which was sold to Thomas Cook two years ago and can no longer be classified as independent.
So where does the departure of relatively large companies leave AITO?
Financially, it is not a tremendous blow. Chandler said the four companies represented only 6% if its income. The smaller companies pay lower subscriptions but use and pay for more facilities. AITOhas also recruited four new, albeit smaller, members and therefore still has 160 members.
Sunvil Holidays managing director Noel Josephides said it was more important than ever that AITOremains strong following the consolidation and continue to promote the benefits its members offer.
“It has never been more necessary for membership to have an aggressive AITO. It is an opportunity we must not miss.”
Josephides is sceptical that AITObrands acquired by the major operators will survive. “If you look at the Falcon boutique brands not one of those names still exists. Once you have sold your business, you do not feel the same way about it. You relinquish responsibility.”