TravelManagers is targeting 10 per cent growth this financial year as it looks to claw back a slower start, with sales around 4 per cent behind last year between April and July.
Speaking to Travel Weekly at the TravelManagers conference in Hobart, chief executive Joe Araullo and executive general manager Michael Gazal said the network expects the first six months of the financial year to be focused on recovering lost ground before growth accelerates.
“We’d like to get to 10 per cent up,” Araullo said. “That’s a real push – but if we’re going to throw a number out there, that’s what I’d like to see.
“I tell the group it’s probably going to take us six months to claw back what we lost, and then surge, hopefully.”
The softer start followed a period of heightened geopolitical uncertainty, with Araullo saying consumers repeatedly delayed travel decisions as they waited for conflict in the Middle East to resolve.
“What happens is consumers go, ‘oh, it’s going to be over in a week, we’ll just wait,’” he said. “Then it kept getting dragged on.”
A ceasefire prompted a rebound in bookings, although Gazal said the recovery had been stop-start rather than a straightforward return to growth.
“It’s confidence – when people start to think, I should travel, I can travel, I can afford to travel,” he said. “And then they make the call and say, can you get me away.”
Growth without chasing numbers
TravelManagers is not expecting recruitment alone to drive its growth ambitions, with organic growth from existing personal travel managers (PTMs) remaining a key focus.
The network currently accepts just 13 per cent of applicants to become PTMs, with Araullo and Gazal arguing that bringing in the wrong people can ultimately undermine both the individual and the wider network.
“We don’t want to set people up for failure,” Gazal said.
Applicants must have at least three years’ experience as a travel agent, while those whose skills the network is less confident in can be required to complete a formal assessment.
Araullo said the network’s approach was deliberately focused on quality rather than simply increasing its PTM headcount.
“It’s not just about the number of PTMs you have,” he said. “It’s about what they [bring].”
The strategy means TravelManagers is looking to grow by helping existing PTMs increase their businesses, while also attracting experienced advisers who can succeed within the model.
Confidence uneven across the market
The rebound in consumer confidence has not been uniform.
Araullo said families balancing children and mortgages were among the most likely to defer travel this year, while more budget-conscious consumers were opting for camping and road trips instead.
Baby boomers in the middle market, however, had remained comparatively resilient.
At the luxury end, the picture is stronger again, with PTMs reporting individual bookings worth more than $100,000 and growing demand for ultra-luxury product.
Gazal said the network was also seeing strong interest in luxury cruise, with operators including Aman and Four Seasons entering the superyacht-style market alongside established six-star lines such as Regent Seven Seas and Seabourn.
Making the PTM model more attractive
TravelManagers is also looking to strengthen the pipeline of future PTMs by highlighting the earning potential of the model.
The network’s top 50 PTMs average more than $300,000 in commissions, according to Araullo.
He said that level of earning potential could help travel compete with professions such as banking that have traditionally attracted ambitious graduates.
TravelManagers has also recruited more millennials into its marketing team to help improve how it communicates the PTM opportunity to younger prospective advisers.
Gazal acknowledged the network needs to sharpen its proposition to younger talent as its existing PTM base ages.
At the other end of the network, TravelManagers is working on succession planning for PTMs looking to retire or scale back.
Many of those advisers are in their late 60s and 70s, creating an opportunity for client books to be transitioned to other PTMs within the network rather than lost when an adviser leaves.
For TravelManagers, the challenge is therefore not simply recovering the 4 per cent lost at the start of the year, but generating another 10 per cent in growth on top of last year’s result.
Araullo’s expectation is that the first half of the year will be about closing that gap – before the network can start to “surge”.
