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A SERIOUSLY DRESSED-UP ADDRESS

The Travel Authority Group’s CEO, Peter Hosper, was recently invited to address an audience hosted by Helm Advisory Chartered Accountants in Sydney.

Peter was asked to present the story behind The Travel Authority’s success, to describe the state of the travel industry, and ponder the immediate and longer term future of this massive industry.

It was an address with a serious message, delivered in lederhosen—a nod to Peter’s homeland. Despite being assured the event was ‘fancy dress’, Peter was mightily relieved to see others had gone to the effort, too.

Below is his speech.


Ladies and Gentlemen,

My name is Peter Hosper, and I am the Co-Founder and CEO of The Travel Authority Group, and I am here tonight to talk about travel.

We live in very strange times, and with all our international and even most of our domestic borders currently being closed, I am sure at least some of you might be thinking “What could he possibly have to talk about?”

When our host Stephen Hathway asked me to join tonight’s event, given his line of work as a liquidator, even I was wondering if he was trying to drum up some new business. After all, the travel industry is all but dead, right?

Seeing that Stephen and I go back more than 25 years, I felt I could be honest and I asked him outright, and his answer was: “No Peter. I want you to tell your story.”

So that’s what I’m here to do tonight. And the first thing I need to say is that the travel industry is definitely not dead.

Like many other industries, however, we are going through tough times. But uniquely, the travel industry was the first to be hit hard directly, and it will be the last to recover. So essentially, we are in the longest ongoing lockdown of them all!

So how did we get here? The one thing our entire industry agrees on is that we are very much used to a constant level of turbulence. You can rest assured that our seatbelts are always fastened.

When we launched The Travel Authority nearly 17 years ago, we were a business that concentrated purely on corporate travel, the internet was coming into full swing, as were smart phones and with them—excuse my language—many smart asses!

It was those smart asses that declared travel agents dead there and then, because everybody would NATURALLY go online, do their own thing in a couple of clicks, and not bother with so-called “the middle man”. The airlines were very quick to capitalise on this sentiment and reduced our commissions overnight – in some cases down to zero, so our revenue was suddenly reduced substantially. And we were just starting up.

RIP Travel Agents. Good bye. Auf wiedersehen!

But to paraphrase Mark Twain, reports of our demise were greatly exaggerated.

To be fair, the industry did have to reinvent itself. Perhaps not unlike accountants and financial advisers (and possibly liquidators?) had to at some stage. And we did. Fast.

We started by putting actual value on the services we provided, and instead of relying on being solely paid by the airlines and other suppliers by way of commissions, we introduced service fees, to be paid by our clients. What a novelty! For us, it really was.

Sure, some agents didn’t make it, or simply found the transition too difficult and got out. But for those of us who embraced the change – we became more profitable, more independent and ultimately, we became better at our job, because we had to demonstrate value for what we were charging.

We also became more powerful, because we were now working for our clients and not our suppliers – the way it should be, really.

So The Travel Authority started growing. We established ourselves as Corporate Travel Specialists and in the same year opened our Resource Travel Division in Western Australia, looking after FIFO workers travelling to and from Oil Rigs. We absolutely LOVED our corporate clients, and they loved us back. So much so that they now also wanted to book their holidays with us.

But we weren’t really set up for this, so we started our Holiday Division – The Holiday Authority, followed by The Events Authority to look after our clients’ Conferences, Incentives and Events, and of course The Cruise Authority – who would have thought that “Cruising” would be a dirty word in 2020? I’ll come back to that…

Things were good. Very good in fact. The Australian Economy was growing, and we were growing with it, and before we knew it we had 4 offices, 50 staff and plenty of work. Even during the Global Financial Crisis we were so confident about our business that we actually guaranteed all our staff their jobs for 12 months minimum – a big gamble that played out very well for us.

Fast forward to 2019. Our business is still growing, Australians continue to travel for business or pleasure in huge numbers, and the Australian Cruise Market is the fastest growing cruise market in the world. Cruise Lines are positioning more and more ships in our region, and we were playing our part in filling them up very easily. Australians are great world travellers, so they also represent a substantial percentage of cruise travellers worldwide.

The Council of Australian Tour Operators’ (CATO) released its inaugural ‘Australians on Holiday – International Leisure Travel Trends’ report in 2019. It showed that in 2018, Australian holidaymakers:

  • Took 6.3 million overseas leisure trips
  • Spent more than 46 billion dollars in total at an average of AUD$7,300 per person

Overall, more than 70% of all travel booked in Australia is transacted through travel agents and travel management companies like The Travel Authority, and just this segment of the travel industry contributes more than 28 billion dollars towards the Australian economy.

Plus, did you know that travel agents employ 40,000 Australians in metro and regional locations.

And we were all declared dead in the early 2000s, remember?

So here we are, 2020. The economy was showing some signs of weakness, and there was talk about ‘this virus’. We were ready for another challenge – after all, we had been through SARS, Swine Flu, the GFC.

How much worse could this covid-thing be?

Well, as it turns out, a lot worse.

As everybody in this room experienced, the world was suddenly a different place. Cruise ships became super spreaders—or ‘petri dishes’ as the media liked to say, airlines grounded their entire fleets, and borders started closing, even within Australia. I don’t know about you, but when the domestic borders were shutting, I thought, Oh crap.

It didn’t take much to realise that we most certainly weren’t going to have any growth this year, but nobody was prepared for what was coming. The thing we specialised in, travel, essentially ceased to exist overnight. We had nothing to sell. Literally! OK, I said to myself, let’s prepare for that.

Next stop: Cancellation Town.

Clients understandably wanted their money back for trips that could no longer happen. Travel Management Companies act as agents, so in nearly 100% of the cases, this money was already sitting with the supplier, such as airlines, cruise lines, hotels and car hire companies etc.—often in bank accounts outside Australia. Imagine a system that is designed for the flow of payments in one direction being put into reverse – it simply couldn’t cope, because it wasn’t designed for that. What a mess!

In the months since, travel agents have never worked harder for their clients, at best changing bookings to next year or the year after. Or, at worst processing cancellations, fighting with multiple suppliers to secure refunds and processing them back to the clients.

We are talking about over 10 billion dollars that are being refunded to Australian clients. The most recent estimate suggests that 6 billion has been refunded, only 4 billion to go.

That money that will go back into the economy, but only if we, as an industry, are able to continue facilitating those refunds—something, we think, the federal government is only just realising through the advocacy of the Australian Federation of Travel Agents.

The refund process was and continues to be slow.

Oh, and by the way, nobody in our industry is being paid for this service we’re providing to their clients. On the contrary. Where we had earned a commission on a booking last year, and that booking now had to be cancelled, we had to hand back that commission this year. You must be thinking by now – what a fabulous industry to be in!

And then there was the exposé of outrage pedalled by a not-to-be-named-but-regularly-shamed ‘current affair’ program, if you can call it that, not understanding how our industry works and painting a rather regrettable picture of travel agents and how they are greedily holding onto the clients’ money. But we dealt with that as well.

Another thought that’s been rattling in my head since our national carrier grounded all international flights: Here we are, an island nation and every person living in it, being 100% reliant on foreign airlines to get in or out – once we are allowed of course. Food for thought.

Back to the travel industry. Still not dead. Not even close.

After the trauma of the last few months and despite everything I’ve just said, we are in the process of dusting ourselves off and looking towards a very bright future. Some people really do think I am crazy when I say this, but if you need any proof of how much Australians are itching to travel again—what Qantas CEO Alan Joyce refers to as ‘pent up demand’—consider this:

  • How long do you think it took Qantas to completely sell out a 7-hour sightseeing flight to nowhere? Go on, guess. 10 MINUTES! Some clients paid nearly $4000.00 for the pleasure.
  • A recent three-day Jetstar sale saw 150,000 tickets sold at a record rate, literally a record rate, of 220 bookings per minute.
  • Only last week, a cruise line put its world cruise on sale for 2022. It took 48 hours to completely sell out the entire world cruise. The cheapest cabin was $200k.

But it’s not just conventional travel transactions like these that point to that pent up demand.

  • In September, Qantas sold 1,000 wine-stuffed bar carts, at between $1000-$1500 a pop—from its retired 747 fleet in just 2 HOURS.
  • Japan’s ANA has been using an Airbus A380 superjumbo that usually flies to Honolulu for a 90-minute Hawaii-themed flight-to-nowhere.
  • In Singapore, Singapore Airlines is offering a genuine First Class or Business Class dining experience in the comfort of your own home. It’s topped off with First Class or Business Class amenity kits, welcome videos, and instructional guides on how to heat and plate the dishes. There’s even a specially curated playlist to recreate your SIA onboard experience at home.

It doesn’t stop there…

  • Also in Singapore THIS COMING WEEKEND, the airline is welcoming diners aboard its A380s—on the ground—who will enjoy “a memorable dining experience in your choice of cabin class, topped with our award-winning service.” You can even watch a movie while you dine. AND GUESS WHAT? They sold out FOUR A380s in THIRTY minutes.
  • Closer to home, overnight flights to see the Southern Lights over Antarctica in April-May next year are going like hotcakes too.

I rest my case.

Oh, and if you’re sick to death of Zoom meetings and worried about never travelling anywhere fabulous for business ever again, you’ll love the findings of recent research by Harvard University’s Growth Lab. According to the study, physically mobilising the ‘knowhow in brains’ through business travel boosts the global economy enormously. We could all use a bit of that right now.

By the way, If anyone here needs the link to that article to show their boss, come and see me after.

So today, we actually do want to talk about the future.

For the travel industry, the future will mean we have to reinvent ourselves again. And we will. We will continue to love our clients and deepen the relationships we have with them, perhaps re-frame how we work with and pay our suppliers, and continue to deliver value at every client touchpoint.

We will emerge from this nightmare maybe a bit leaner—as we have from all the others—but also stronger. Judging by my own team, there are so many talented specialists in our industry who will be there when the madness is over and who can’t wait to be of service again when the time is right.

Australians will continue using Travel Management Companies with confidence.

Thank you Stephen and Helm Advisory for inviting us here tonight, and to all of you in the room, thank you for listening to our story. And please remember, when you’re ready to release a little of your own pent-up-demand once the borders are open, let us love you too!

QANTAS: Getting Engines Running

Even though it will be a while before Qantas’ long haul fleet returns to the skies commercially, the airline’s aircraft aren’t completely idle during this hibernation.

Qantas and Jetstar have 220 aircraft grounded at various airports around Australia and overseas due to the drastic reduction in domestic and international flying due to the COVID-19 pandemic.

Still, even when grounded, there’s plenty of work being done to keep their aircraft ready for when flying resumes.

“Images of commercial aircraft parked at airports and storage areas around the world really are astonishing.”

Peter Hosper, CEO of The Travel Authority Group.

“It’s fascinating to see what’s going on behind the scenes to maintain these huge aircraft while they’re grounded,” adds Hosper.

As we’ve reported before, the aircraft might be grounded but they’re being well attended to by engineering, maintenance and cleaning staff. And the engines need particular attention to keep them ready-to-fly.

Qantas’ Head of Line Maintenance John Walker says every aircraft needs to have an “engine wakeup” and for our Boeing 747s it’s required every seven days. And here’s what that process looks like.

Each of the 747 jumbo engines consumes up to 600 kilos of fuel per hour at idle and at full take off power (not used during the engine run) generates up to 60,000 pounds of thrust.

For the information about Qantas and its plans to return to the air, leave us a note in the form below, or CALL US to discuss your specific requirements.

We’d love to hear from you.

QANTAS Prepares for Easing Restrictions with Flexibility & ‘Fly Well’

Qantas and Jetstar are rolling out a series of wellbeing improvements from 12 June for peace-of-mind in preparation for domestic travel restrictions easing.

The ‘Fly Well’ initiative brings together a range of temporary measures, and represents a combination of best-practice medical advice and feedback from customers.

“We are so encouraged by this action from the Qantas Group, as it hints at the green shoots of recovery.”

Peter Hosper, CEO of The Travel Authority Group

Customer research shows 98 per cent of frequent flyers are planning their next trip once restrictions lift.

“We know we’re still a long way off returning to the travel industry ecosystem of the pre-Covid economy, but every step towards getting people flying again is a positive one,” added Hosper.

The Fly Well measures cover both pre-flight and in-flight experience, including masks being provided to all passengers on each flight. While not mandatory, they are recommended to be worn in the interests of everyone’s peace-of-mind.

The video below highlights some of the Fly Well measures.

You can DOWNLOAD the QANTAS FLY WELL Fact Sheet HERE

The airline points out, too, that the air conditioning systems of all Qantas and Jetstar aircraft are already fitted with hospital-grade HEPA filters, which remove 99.9% of all particles including viruses. Air inside the cabin is refreshed on average every five minutes during flight.

“We’re relying on the cooperation of passengers to help make these changes work for everyone’s benefit, and we thank them in advance for that. Given the great job Australians have done at flattening the curve, we’re confident they’ll respond positively to these temporary changes to how we fly.”

Qantas Group CEO, Alan Joyce.


IMPROVED FLEXIBILITY FOR CUSTOMERS

With so many regular flyers planning their next trip as travel restrictions are steadily adjusted, Qantas and Jetstar have also announced more flexibility.

Domestic

Book any Qantas or Jetstar Australian domestic flight between 21 May and 30 June 2020, for travel between 12 June and 31 October 2020, and the airline will waive the change fee one time if you decide to change the date of your travel. Customers will have to cover any fare increase (if relevant) for the new booking.

International Flight Credit Extension

Further flexibility has been introduced for international bookings (excluding Trans-Tasman). Customers with an existing Qantas or Jetstar international flight booking, for travel between 1 August and 31 October 2020, who wish to change their plans, can cancel their booking and retain the full value as a flight credit.

Flight credits must be requested by 30 June 2020 and are valid for booking and travel across domestic and international services by 31 December 2021. Jetstar credit vouchers allow up to two years to travel from issue date. Customers will have to cover any fare increase (if relevant) for the new booking.

If your flight is cancelled by the airline, you will be rebooked on the next available flight at no additional cost. Alternatively, you can choose a flight credit or a refund.

For more information, simply leave us a note in the form below, or CALL US to discuss your specific requirements.

We’d love to hear from you.

SOCIAL Distancing at 40,000 Feet

During these times of isolation and physical distancing, it’s not unreasonable to wonder how this might work at 40,000 feet.

Even though most of the world’s commercial passenger aircraft are parked and patiently awaiting the restart of the global economy, many airlines still have a few aircraft servicing essential routes. So, if you find yourself on one, how will you ensure a safe, social distance from the other passengers?

In what might just be the best silver lining in all of this, airlines are leaving their dreaded middle-seats empty.

“Flying is going to feel different for a while yet. Fewer flights, fewer people, fewer everything. But, on the up-side, more space for everyone.” 

The Travel Authority Group’s CEO, Peter Hosper.

Or as Virgin Australia describes it, “Virgin Australia has implemented new social distancing measures on all scheduled domestic flights until further notice. Guests will have the seat next to them blocked as part of the new social distancing policy.”

Similarly at Qantas, whilst acknowledging that the risk of contracting Coronavirus on board an aircraft is regarded as low, “social distancing has been put in place across all flights.”

Our friends at US carrier Delta Air Lines also recently supplied this update around its new COVID-19 practices and policies for all flights through the end of June:

  • Reducing the total number of passengers per flight.
  • Blocking middle seats in Main Cabin, Delta Comfort+ and Delta Premium Select.
  • Modifying boarding process so customers will now be boarded by row, starting from the rear of the aircraft.

For information about how your favourite airlines are dealing with social distancing and other parts of their services, simply leave us a note in the form below, or CALL US for a chat.

We’d love to hear from you.

VIRGIN AUSTRALIA Enters Voluntary Administration

The Virgin Australia Holdings Limited Board of Directors has appointed Deloitte as voluntary administrators of the company and a number of its subsidiaries.

The airline advised that it has entered voluntary administration to “recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis.”

“We feel for our friends at Virgin Australia, and wish them well as the airline navigates its way through the headwinds of administration and beyond. This is a disappointing moment for Virgin Australia and travel industry more broadly. Australia needs two robust, competitive airlines. We’re hopeful that this process delivers that.”

The Travel Authority Group’s CEO, Peter Hosper.

Virgin Australia will continue to operate its scheduled international and domestic flights which are helping to transport essential workers, maintain important freight corridors, and return Australians home.

Administrator, Vaughan Strawbridge, said: “Our intention is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible.

“We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interest so far,” Strawbridge added.

Velocity Frequent Flyer, while owned by the Group, is a separate company and is not in administration.

“Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the COVID-19 crisis.”

Virgin Australia Group Chief Executive Officer, Paul Scurrah.

“In 20 years, the Virgin Australia Group has earned its place as part of the fabric of Australia’s tourism industry. We employ more than 10,000 people and a further 6,000 indirectly, fly to 41 destinations including major cities and regional communities, have more than 10 million members of our Velocity loyalty program, and contribute around $11 billion to the Australian economy every year,” said Mr Scurrah.

“Australia needs a second airline and we are determined to keep flying. Virgin Australia will play a vital role in getting the Australian economy back on its feet after the COVID-19 pandemic by ensuring the country has access to competitive and high-quality air travel.”

For more information, simply leave us a note in the form below, or CALL US to discuss your specific requirements.

We’d love to hear from you.

QANTAS Network & Services Update

This update is based on airline information supplied on 10 March 2020.

The Qantas Group has announced further cuts to its international flying schedule, reducing capacity by almost a quarter for the next six months.

“We will be reducing some services and using smaller aircraft, which means we can maintain overall connectivity, and ensure our customers are still able to reach their destinations. The changes will be extended from end-May until mid-September 2020.”

Qantas spokesperson

The latest cuts follow the spread of the Coronavirus into Europe and North America over the past fortnight, as well as its continued spread through Asia, which has resulted in a significant drop in forward travel demand.

Qantas has advised that capacity reductions to the United States (down 19%), the UK (down 17%) and Trans-Tasman (down 10%) will also be made in line with forward booking trends.

More Perth-London services

Strong customer demand Qantas’ direct Perth-London service has led the airline to temporarily re-route the existing Sydney-Singapore-London return service (QF1 and QF2) to become a Sydney-Perth-London return service.

This will take effect from 20 April 2020.

Change fee waivers for new international bookings

Given the changing landscape, Qantas is offering customers some flexibility to encourage booking confidence.

A one-time fee-free change to new international flight bookings made between 10 – 31 March 2020, for travel before 30 June 2020, subject to availability.

Some conditions apply. Please contact us for details.

“We expect lower demand to continue for the next several months, so rather than taking a piecemeal approach we’re cutting capacity out to mid-September. This improves our ability to reduce costs as well as giving more certainty to the market, customers and our people,” said Qantas Group CEO, Alan Joyce, announcing the changes.

Qantas stressed that it retains the flexibility to cut further or to reinstate capacity as this situation develops.

“If you have existing bookings held and confirmed by The Travel Authority Group, we will be in touch to discuss your options.”

The Travel Authority Group’s Managing Director, Peter Hosper

In most cases, international passengers will be offered an alternative flight via another capital city or a partner airline, or an alternative day. Disruption to domestic passengers is expected to be minimal given the continued high frequency on most routes.

We continue to monitor all official sources of coronavirus-related information, and maintain contact with all of our airline partners to ensure we’re across all developments.

For more information, leave a note in the form below, or CALL US to discuss your specific requirements.

NEW QANTAS Services to Vancouver

Qantas has published seasonal Sydney-Vancouver flights from 12 December 2020 – 27 February 2021, offering passengers a direct route between Australia and Canada during the busy ski season.

“This is a great initiative from the national carrier,” says The Travel Authority Group’s Managing Director, Peter Hosper.

“I have no doubt it will be really popular with Australians chasing Canada’s famed powder snow and wintery delights. And it offers another great opportunity for Qantas frequent flyers to earn and use their points.”

Peter Hosper

Previously operated from December through to January, this service has now been extended by a month next season due to the popularity of the route.

Three weekly return flights will operate on Monday, Thursday and Saturday, serviced by the Qantas Boeing 787-9 Dreamliner for the first time, replacing the Boeing 747 aircraft:*

Qantas is also operating these direct services over June-July 2020.

Contact us for more details and to book!

Leave us a note in the form below, or CALL US to discuss your specific requirements.

We’d love to hear from you.

NEW BOEING 777X Successful First Flight

Boeing’s newest jetliner, the 777X, has taken to the skies, commencing the next phase of its rigorous test program.

Based on the popular 777 and with proven technologies from the 787 Dreamliner, the 777X embarked on a nearly 4-hour test flight from Paine Field in Everett, Washington, to Seattle’s Boeing Field in late January 2020.

“Our Boeing team has taken the most successful twin-aisle jet of all time and made it even more efficient, more capable and more comfortable for all.”

Stan Deal, president and CEO of Boeing Commercial Airplanes.

The new 777X combines the best of the 777 and 787 Dreamliner cabins with new innovations to deliver the flight experience of the future. Passengers will enjoy a wide, spacious cabin, large overhead bins, larger windows, better cabin altitude and humidity, as well as less noise and a smoother ride.

“We love new aircraft development and the push from manufacturers for improved efficiency and passenger experience,” said The Travel Authority Group’s Managing Director, Peter Hosper.

“Both Boeing’s 777 and 787 Dreamliners have proven themselves to be exceptional aircraft, and we’re excited about the best of both of those aircraft coming together in the 777X.” 

Peter Hosper.

Boeing expects to deliver the first 777X in 2021.

The new aircraft program has secured 340 orders and commitments from leading carriers around the world including ANA, British Airways, Cathay Pacific Airways, Emirates, Etihad Airways, Lufthansa, Qatar Airways and Singapore Airlines.

For more information, simply leave us a note in the form below, or CALL US to discuss your specific requirements.

We’d love to hear from you.

JUST BACK FROM: Madrid

The Travel Authority Group’s Managing Director, Peter Hosper, recently returned from a visit to Madrid, and he stayed in one of the city´s best kept secrets—The Principal Madrid hotel.

Situated on one of the city’s most iconic avenues—the Gran Via—The Pricipal Madrid features 76 elegantly-appointed rooms, and a stunning rooftop Terraza with what may well be the best views in Madrid.

“I am very picky about where I stay in Madrid, and I absolutely loved my stay at The Principal Madrid,” said Peter.

“The hotel is represented in Australia by our friend Sarah Whitty and her team at The Hotel Connection and, without a doubt, I have found my new home away from home in Madrid at their fabulous property. It delivers exceptional service, all the bells and whistles of a grand hotel, yet you feel like you are at somebody’s fabulous home,” he added.

For more information, simply leave us a note in the form below, or CALL US to discuss your specific requirements.

We’d love to hear from you.

QANTAS Makes ‘Project Sunrise’ Aircraft Decision

After detailed evaluation of Boeing 777X and Airbus A350 aircraft, Qantas has announced that Airbus’ A350-1000 is the preferred aircraft for its proposed ultra long haul ‘Project Sunrise’ routes.

Having said that, it’s worth noting that regulatory support for the new routes is still pending, and discussions with Qantas pilots are ongoing.

No aircraft orders have been placed yet, but Qantas will work closely with Airbus to prepare contract terms for up to 12 aircraft ahead of a final go/no-go decision by the Qantas Board in March 2020.

“Qantas’ Project Sunrise planning is really exciting,” said The Travel Authority Group’s Managing Director, Peter Hosper.

“New aircraft, new in-flight experience, and new ultra long haul city-pairs mean exciting new opportunities for our business and our clients. We look forward to adding them to our service and expertise mix as they roll out”

Peter Hosper, Managing Director of The Travel Authority Group.

Trialling in-flight menus for Qantas’ ultra long-haul ‘Project Sunrise’ services.

Qantas Group CEO Alan Joyce said the airline’s support for Project Sunrise was stronger than ever, particularly after the success of recent ‘dry run’ research flights.

Qantas Group CEO, Alan Joyce, aboard the airline’s non-stop London to Sydney test flight.

“Between the research flights and what we’ve learned from two years of flying Perth to London, we have a lot of confidence in the market for direct services like New York and London to the east coast of Australia.

In-flight exercises aboard Qantas’ recent non-stop ‘Project Sunrise’ test flight between London and Sydney.

“The A350 is a fantastic aircraft and the deal on the table with Airbus gives us the best possible combination of commercial terms, fuel efficiency, operating cost and customer experience.”

Qantas Group CEO, Alan Joyce.

If things go to plan, the first commercial Project Sunrise flights will take to the air in the first half of 2023.

For more information, simply leave us a note in the form below, or CALL US to discuss your specific requirements.

We’d love to hear from you.