Corporate travel agencies spot a potentially lucrative side hustle by utilizing displaced agents. And why not?
A raft of travel agency groups have set up new divisions to cater to an anticipated influx of laid-off agents-turned-consultants.
Omega World Travel this week launched a network for independent agencies and advisors, for both its corporate and leisure markets, offering technology and business services.
“We realize that one size does not fit all within the travel industry, which is why we have the ability to customize a program that meets any size agency, business model, or budget,” said Gloria Bohan, CEO of Omega World Travel and Cruise.com.
UK consortium Advantage Travel Partnership recently set up a dedicated homeworking division called Travel Specialists by Advantage. The new framework and fee structure, for leisure and corporate travel agents, are based on 2 percent of turnover, and Advantage said it was positioned as a hybrid model between a traditional homeworking organization and a managed services model.
“With Covid-19 impacting travel agents’ jobs across the country, this will provide an alternative homeworking choice that is supported by a trusted membership organization,” it said.
Flight Centre Travel Group, meanwhile, has now introduced new business models in the UK for leisure consultants. The company has shed two thirds of its global workforce since the pandemic started, and was one of the first major groups to take early action, announcing it would close 800 stores in April.
It said this was being planned before the pandemic, but was fast-tracking it to retain as many employees as possible, via a network of virtual consultants. It also launched an associates model, for more experienced consultants to run their own business but still under the Flight Centre brand.
Across our leisure business as well as our Corporate Traveller and Flight Centre Business Travel divisions, we have for the first time introduced an associate-style model for some of our most experienced and successful consultants,” said Liz Matthews, head of retail, Flight Centre UK. “While not a fully independent model, as they remain employees of Flight Centre, it is fully home-based, with flexibility for those individuals as to how they manage their time and customers.”
These latest developments follow Blue Cube Travel’s own decision to branch out with a new arm to take on independent consultants and offer them the relevant licenses to do business. It’s being officially launched in the third quarter.
Blue Cube’s managing director isn’t surprised by the these latest agency expansions. “This is a response from the industry to try and give a lifeline back into the industry that they’ve worked in for years,” said Bex Deadman. “It’s devastating to see travel consultants that have worked so hard and looked after clients so well out of work and potentially leaving this industry for good.”
How Bad Is It?
In June, Travel Counsellors told Skift it was expecting a surge in applications as state support schemes start to expire, with micro agencies a logical next phase in the travel management cycle following reductions in corporate travel programs.
The UK, in particular, is approaching this deadline soon, with the Business Travel Association already seeing one of its members, Business Travel by STA, fail last week.
While the hospitality sector has been boosted by the government’s Eat Out to Help Out scheme, similar aid is being requested for the corporate travel sector. Top of the list is an extension to the furlough scheme.
The Business Travel Association has called on the government to provide financial support to cover 60 per cent of salaries of employees in business travel companies until at least the end of 2020. The UK’s furlough scheme expires at the of October. The association is proposing this can be repaid by those agencies through 10 per cent of profits each quarter. It also asked for a 12-month business rates holiday to provide firms with vitally needed liquidity.
“These are difficult times for the business travel community and the parachute package we have put forward to government is designed to help agencies survive until demand returns,” said CEO Clive Wratten.
“If the new homeworking divisions being established can form sources of employment for business travel consultants who have lost their jobs, then that is to be welcomed. It is also crucial that the existing agency infrastructure remains intact as it is a vital enabler for the UK economy, and will be integral to getting business traveling and trading again.”
Travel association ABTA estimates 90,000 jobs have already been affected in travel and wider industry by measures to control the pandemic, with 18 percent of jobs, in outbound travel, such as tour operators, travel agents and airline staff, have already been lost or placed at risk, according to a survey of its members. It claimed the situation is set to worsen with 78 percent of businesses yet to enter redundancy conversations expecting to do so in coming months based on current trading conditions.
Elsewhere, the British Educational Travel Association has called for more government support. “Having had little to no bookings in our sector since the start of the crisis, over 83 percent of members have staff on the furlough scheme and 67 percent are reporting redundancies in the coming months,” it said. “With travel restrictions further impacting our ability to restart, 63 percent of members are reporting only being able to survive for three to six months without further support.”
What some of these agencies that are preparing redundancies might not appreciate, Blue Cube’s Deadman added, is that as well as seeing staff go, clients could follow too.
“What might have been overlooked is the importance of personal relationships and trust, which is built up over many years. As we start to move again, post-lockdown travelers within companies will be looking for trusted advice,” she said.
Not only do these new agency divisions tick the good marketing box, showing they care for an industry that’s increasingly under pressure, they’ll also be looking to take on new business accounts that follow the consultant.
Towards the end of the year, expect to see more dedicated divisions created to embrace expert consultants with open arms.
Have a confidential tip for Skift? Get in touch