Advantage Travel Partnership signalled its faith in the industry’s post-pandemic recovery as it revealed expansion plans including talks with private investors keen to enter the sector for the first time.
The consortium unveiled its future growth strategy at its first in-person conference for three years, hosting more than 300 agents and suppliers in Funchal, Madeira.
It is expecting membership to grow by 12% by the end of this year and by 20% in 2023, through a mix of new start-ups, agents joining from other consortia and expansion of its homeworking division. The projections follow a reported 7% hike in membership since 2019.
Chief executive Julia Lo Bue-Said unveiled the three-year strategy to grow its membership “across all business models” with a target of becoming a “one-stop shop” for all agents. She stressed the group had a “strong balance sheet of more than £5 million” to invest in membership benefits, having reduced its losses from £1.6 million for the year ending September 30, 2020, to £327,000 in 2021 by “cutting costs and running the business prudently”.
The consortium reported strong demand for its Advantage Managed Service (AMS) division. It said it was receiving applications to join from existing members, agents from other consortia and private investors looking to expand into travel with “big new start-ups”.
Advantage members currently have 600 branches, of which 75 are AMS branches. AMS members can focus on sales and marketing while Advantage takes care of supplier payments, back-office administration and bonding, with all retail bookings, including operator packages, financially protected by its trust.
“AMS is where the growth is coming from and where we see potential,” said Lo Bue-Said, adding: “Conversations are happening now. Private investors thinking of going into travel see the recovery as an opportunity to get into the industry and regard Advantage as a safe pair of hands.”
She attributed the growing popularity of the managed service model to the problems facing agents, such as securing merchant acquirers and renewing bonds.
Advantage leisure director Kelly Cookes went as far as to predict managed services could become the industry’s dominant business model for agencies in the future.
“In the long-term, the majority of our members could be AMS,” she said.
“All new start-ups are going for a managed service offering. I think in 10 to 15 years, managed service agents could be the dominant model.”
But she stressed: “That’s not to say there isn’t a place for the traditional agency model. The plan is to grow in all areas. We are really strong on the high street and don’t want to lose that.”
The consortium said it was also seeing “natural growth” in the homeworking sector, with plans to “scale up” its own division of experienced homeworkers, called Travel Specialists by Advantage, which currently number fewer than 10.
“Over the next few months you will hear more,” she pledged.
The consortium’s three-year strategy also includes increasing its commercial partnerships, expanding digital marketing and engagement, and a plan to “do fewer things but do them well”, such as improving contact centres and supporting agents with sustainability and performance goals.
Since the onset of the pandemic, Advantage has started to work with an additional 25 suppliers and dropped “a handful” due to their service levels and action on refunds.