By Martin Kelly
Travel is in a crazy mixed up place right now. But isn’t that always the case?
Everyone is out for themselves, partnerships are fracturing and the retail industry has been turned on its head by an outsider no-one knows anything about.
S8, which operates out of an apartment block on the Gold Coast, moves with the reckless speed of a 1980s corporate raider, and appears to have a travel distribution strategy firmly rooted in that era.
It has bought into old-school travel businesses in a massive way.
Harvey World Travel was the first to fall, followed in rapid succession by Transonic Travel, Travelscene American Express and Gullivers Travel Group.
All up, S8 claims it will have more than 2000 traditional travel agents in Australia New Zealand, South Africa and the United Kingdom (though most are franchisees) when the takeovers are finally completed.
Through these acquisitions it’s also obtained corporate travel, wholesaling and GSA companies – just about every part of the travel distribution chain.
Except – and this is the weird thing – an internet business.
In fact, S8 has flat out rejected the online travel world.
The company has now sold every one of the Webjet shares and options it obtained via Harvey World Travel, no doubt using the proceeds to pay off debt incurred by its buying spree.
They’ve made many millions of dollars but the decision to sell seems a little strange, especially when you consider the online momentum generated by the spectacular Wotif float.
Does S8 know something we don’t?
Don’t bet on it.
I certainly wouldn’t, and, on recent evidence, neither would the Australian Federation of Travel Agents, which is paid to echo the views of its members, including several prominent S8-owned businesses.
AFTA wants to run a $1 million campaign promoting the benefits of buying through a real, live travel agent, as opposed to internet retailers.
“The chains previously considered this to be their job but now we’re seeing headlines like ‘Expedia Putting Agents Out of Business’,” Chief Executive Mike Hatton told Travel Today.
“You (also) hear airlines advertising on the radio mentioning everything but the travel agent.”
The unfortunate thing is that AFTA doesn’t have $1 million.
So it’s gone to Plan B – spending $2000 on a logo declaring “Without a travel agent you are on your own”.
Members will be encouraged to use the slogan in their marketing as a weapon in the fight against the internet, which AFTA clearly views as a major threat.
Yet S8 doesn’t.
After all, it’s just sold out of Australia’s biggest and most profitable online retailer, doesn’t own a stake in any other well-known online brand and has effectively put all its eggs in the traditional travel agent basket.
Weird, don’t you think.