The launch of a direct competitor to wholesalers by a former Council of Australian Tour Operators chairman has sparked controversy with its founders accused of misleading prospective travel agent members.
Simon Hills, CATO chairman between 2004 and 2010, and John Morley, former chief executive of Kirra Holidays, yesterday revealed the launch of Maestro Travel, a business that will provide agents will nett rates direct from Destination Management Companies in 28 countries.
The business has already been the subject of debate at the recent CATO meeting in Brisbane with CATO general manager Peter Baily telephoning Hills and current chairman Rod Eather emailing his predecessor to outline their views and those of some members.
There is a general feeling that Hills’ venture could inflict damage on his colleagues within CATO.
Hills told Travel Today he was aware Maestro had already created “rumblings”, but insisted he still “fervently” believed in wholesaling.
“I own a wholesaler and will continue to do so but it does not mean it’s the only way or the only distribution available,” he told said. “I am as committed to wholesaling as I have ever been. I am just diversifying my interests.”
CATO member Richard Ruskin, managing director of Four Corners Travel Group which lists African Travel Specialists among its brands, questioned the Maestro’s assertion that wholesalers mark up product by as much as 35%.
“That is inaccurate and misleading,” Ruskin said. “Australian wholesalers work on very small mark ups which are nowhere near 35%.”
He added that his own company was “incredibly competitive” compared to online rates.
It was “unfortunate” that Hills had used his position as a former CATO chairman to illustrate his industry experience, Ruskin added.
CATO chairman Rod Eather said: “What Maestro is doing goes against what we are trying to do at CATO. There are some people who feel he has done the wrong thing as a former chairman and are put out by it.
“Personally, I don’t blame people for looking at different ways of doing business.”
Hills rejected criticism surrounding the 35% mark up figure, stressing he said it was “up to” 35%.
“I have worked for six wholesalers and in every case the mark up was in the range between 25% and 35%,” he said.
