New Helloworld chief executive Andrew Burnes wants to compete better against rival Flight Centre. Photo: Daniel MunozNew Helloworld chief executive Andrew Burnes will harness the drive of the company’s travel agency franchise owners, rather than competing against them, to make the diverse group more competitive against rival Flight Centre Travel Group.
“I think we’ll be undertaking some changes in the year ahead to ensure we align our online strategy and our retail strategy,” he said after Helloworld shareholders voted overwhelmingly to approve the purchase of his private company, AOT Group, on Friday. “I believe with our business that our online strategy has to be complementary with our retail franchisees.”
Mr Burnes, who is also the federal treasurer of the Liberal Party in an election year, and his wife Cinzia, now an executive director of Helloworld, have emerged as the largest shareholders in the listed company with a 40 per cent stake.
He said it was the Helloworld head office’s responsibility to hand over business to travel agents whether through the door, on the phone or online rather than to develop a separate, competing online offering.
Mr Burnes said it was also important that Helloworld’s corporate arm, QBT, which handles bookings for the whole of government travel contract, stuck to competing for business only at the bigger end of town.
“We have a very important business network of agents specialising in the [small and medium enterprise] sector,” he said. “And so we’re very careful to try to ensure that in our own QBT space we are in the bigger end of the corporate travel space and getting out of the way of our many excellent Helloworld for Business members and allowing them to get on with their business as well.” Franchise model
Helloworld uses a franchise model whereas Flight Centre owns almost all of its travel agencies. Mr Burnes said he did not believe the differing business models made Helloworld less competitive.
“The franchisees are running their own small to medium – and in some cases, quite large – businesses,” he said. “They are extremely highly motivated. They look after all of their own personnel, their own leasing issues, their own community-based marketing and brand marketing for their brands. That is something that in the Flight Centre model is completely the opposite.”
The Helloworld brand launched in 2013 as part of an effort to consolidate marketing efforts around a single brand rather than maintain the separate Harvey World Travel, Jetset Travel, Travelscene American Express and Travelworld brands.
The size of the Helloworld network shrunk by 9 per cent in 2014 and 2 per cent in 2015, in part due to franchises unhappy with the rebranding deciding to exit.
Mr Burnes said it was understandable that not all owners were happy with the brand change, but he said he was hopeful he could turn the tide and begin to enlarge the network again.
“I think if we can provide a compelling enough model … then yes I’d like to think that there are franchisees who maybe were part of it, they might come back,” he said. “And I’d like to think that some who were never part of it might come over.”
Flight Centre managing director Graham Turner this month said he hoped the Helloworld-AOT merger would have a positive impact on the travel industry.
“It is important for us that we in the bricks and mortar space have financially strong competitors,” he said. “If everything works well for them it could be a reasonably positive outcome.”
Acting Helloworld chairman Rob Marcolina said the company planned to provide more information on the outlook of the newly merged group alongside its half-year results on February 24. The company is searching for a new chairman and an independent director. Mr Marcolina, an executive at major shareholder Qantas, said candidates had been short-listed and an announcement was expected within a few months.
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