A brand may be an intangible asset but it’s arguably the most important one a business has. Not surprisingly then, there have been some fascinating historical examples of companies going to great lengths to get branding right. Take Marlboro, the leviathan cigarette manufacturer that enjoyed a meteoric boost in sales in the 60s and 70s on the back of its iconic Marlboro Man advertisements. Alas, by the 80s compelling scientific evidence and noisy lobby groups were telling the world that Marlboro’s products were killing its consumers.
Then, in 1988, Philip Morris USA (the company that owned Marlboro) bought food giant Kraft for $12.9 billion. The amount paid was considered massively over the odds but financial observers spotted something. Firstly Kraft, a so-called Number One brand, had untapped market potential. The second factor was more interesting still – the squeaky clean Kraft name might just enter the Philip Morris USA stable and cancel out the negative perceptions created by the tainted Marlboro brand.
This is just one example of the power and influence a brand can hold for a company. But as 2013 draws to a close, many in the Australian retail travel industry will be pondering the importance of their own masthead, particularly those under the Jetset Travelworld Group (JTG) umbrella.
In July this year Rob Gurney, the chief executive of Jetset Travelworld Group, declared the multi-limbed retail giant would unite under one banner – Helloworld. But with JTG’s wider empire comprising some 1500 agencies across Australia including well-established heavy hitters like Harvey World Travel, Jetset, Travelscene American Express and Travelworld, the move away from long standing marques was always bound to have its fair share of detractors.
In the ensuing months many agency managers and owners have gone on record to voice concern over the loss of brand equity the change could spell for their businesses. Others asked how four agencies in a regional town would fare if they all were to trade under the Helloworld banner.
This unease no doubt has established players in the travel industry rubbing their hands together, at least privately, at the prospect of adding capable but disenfranchised agencies to their ranks.
And already some big fish have been landed. In recent weeks – no doubt to JTG’s infinite relief – Phil Hoffmann Travel, the Adelaide-based eight-location agency group with over 150 employees announced it would join Helloworld as an associate member. Long affiliated with Travelscene American Express, had Hoffmann sought pastures new, it would have been a major blow to JTG’s recruiting ambitions. His endorsement, it will be hoped, might give new confidence to others to nail their colours to the Helloworld mast.
But not all have been wooed over. In late October the respected Penny Spencer of Spencer Travel announced that although she thought Helloworld was “the right way forward” for JTG, she would not be coming along for the ride. Instead, she has taken her business into the waiting arms of Magellan Travel in a major coup for the group.
But Magellan, while no doubt pleased with the signing, have made it clear they are not in the business of poaching agents. “We are not being opportunistic. People [JTG agents] are now having a closer look at their options because they are being forced to make a pretty big decision. It’s obvious they are going to look at the alternatives,” Magellan chairman Andrew Jones told Travel Weekly’s sister publication Travel Today in late October.
Those whose bread and butter is understanding brands intimately can see the conundrum that JTG faces. Dan Ratner, managing director of Sydney-based branding experts Uberbrand is not surprised by JTG’s adoption of the Helloworld marque. “With all its [JTG’s] individual brands, there’s likely so much overlap in the minds of consumers that consolidation into one brand is the best way to make sense of this. Sometimes the best thing to do is to wipe the slate clean and start again – a new conversation with no baggage.”
But he can appreciate the hesitation in the market to move away from established brands. “Frontline agents are likely to be resistant; they will worry legitimately about the costs of store makeovers, new livery and a campaign reboot,” he said.
Orient Express Travel Group (OETG) is one big player in the travel industry that can potentially provide an alternative for those within JTG’s ranks. The company’s own agency groups include the Independent Travel Group (ITG) and Select Travel Group, both of which offer individual member agencies a healthy degree of autonomy. The Independent Travel Group, for example, states that it provides agents with a flexible, transparent, low-cost core support service with low membership fees. Members also have access to the Express Ticketing suite of products.
Retaining the brand name and a certain nimbleness are key selling points for ITG. “The advantages for our members are that they remain in control, we offer full support services. The agents are dealing with a small, flexible senior management and staff structure, so costs are kept to a minimum and commission contracts and preferred supplier rebates are transparent and flexible. They can choose and sell what they want without any head office bureaucracy,” OETG chief executive officer Tom Manwaring (pictured) said.
So how real is this potential exodus from JTG’s ranks and what sort of opportunity does it present for others? Gurney himself has gone on record and predicted 1000 agencies will heed the call to march under the Helloworld banner, with 60% becoming fully branded agencies. But this figure concedes that a significant number will head elsewhere
However, in late October Gurney announced that 100 Helloworld stores had already signed up and that agreements were being discussed with 150 further outlets, which would suggest recruitment is going to plan.
In spite of this, Barry Mayo, chairman of home-based network TravelManagers, told Travel Weekly his phones have been ringing. “We have had a number of inquiries from differently branded JTG agencies in Victoria, New South Wales and Queensland. There is an opportunity here [with JTG agents] and we would describe these inquiries as works in progress,” he said.
Manwaring has also noticed a spike in inquiries. “The rate of inquiry has increased significantly for both associate membership and branded options within the ITG model. The ITG total membership currently stands at approximately 220. We have a strategic target of about 350, which along with our Select Travel Group figure of 350, will ideally give Express Ticketing a distribution network of 700 agents.”
For now Helloworld is still very much a concept brand in the eyes of agents. The real task ahead will be for Gurney and his lieutenants to convince more member agencies to stay in the fold. But with many others in the industry sensing their opportunity, agents will have no shortage of charming suitors on the proverbial doorstep as 2014 rolls around.
* In this article in the November issue of Travel Weekly magazine, TravelManagers chairman Barry Mayo has the incorrect job title and company name attributed to him. The error is corrected in the copy above.
