Who would be a wholesaler in today’s untidy, cluttered and fragmented market, a market almost unrecognisable from a decade ago?

To use the common description of the current wholesale environment, it is “challenging”.

By challenging, what wholesalers really mean, at least those with a traditional business model with a reliance on travel agent distribution, is that it has become a congested splintered nightmare of a market in which to operate.

Competition lurks at every turn. Long standing partners have become competitors, agents have become quasi wholesalers, overseas suppliers are marketing directly to agents, online agents are moving into the package market as well as offering dynamic pricing.

The owner of one wholesaler, Simon Hills of Icon Holidays, even set up a new company, Maestro Travel, to tap into the growing propensity of agents to work with overseas suppliers. No point trying to hold back the tide, swim with it, was Hills’ conclusion

It caused a great deal of understandable consternation among his fellow members at the Council of Australian Tour Operators – an issue covered by Travel Today last year – but Hills can hardly be blamed for diversifying.

He still has his wholesale business but he also branched out to embrace the new world order.

And so we come to Creative Holidays, which I have long argued is more exposed than most to the changing market dynamics and move towards vertical integration.

To steal a very apt description used by Creative managing director Paul McGrath, the market was “orderly” a decade ago.

The web was in its infancy, online travel agents had not taken off in any meaningful way, agents’ major source of information and resource was a brochure and customers were content to wait for quotes and booking confirmation. If you listen closely you can hear traditional wholesalers sigh with the memory of such an uncomplicated existence. Not that it was easy of course, just a world of uncomplicated distribution.

Creative, which has clearly recognised the threat to its model, is embarking on fundamental change which it hopes will keep it relevant in an environment where the nothing is as it was 10 years ago.

As Travel Today exclusively revealed in a two-part interview with McGrath – click here for part one, click here for part two – Creative will move off the Calypso booking system in November and migrate to a wed-based platform. Make no mistake, this is a huge piece of work for Creative.

The change will allow the wholesaler to offer a far broader range of product, richer content, dynamic pricing and provide agents with the ability to dynamically package content.

Traditional packages will remain, as will brochures, but Creative is effectively positioning itself to compete with the likes of Webjet, Wotif and Expedia, not to mention the plethora of hotel and airlines sites and numerous other OTA’s.

It’s a move it simply has to make. Packages with static pricing are all well and good – indeed, OTAs are moving into that space and a segment of the holiday buying public still seek the security of an all-encompassing package – but as web-based firms continue to take market share, direct agent-supplier relationships strengthen and consumers become ever-more informed and demanding, Creative has been left with no choice but to move with the times and enter the unfamiliar world of dynamic product and pricing.

One senior travel agent told me this week that he thought Creative was admitting defeat, selling out.

I don’t agree.

It’s not a case of admitting anything, more a realisation that to maintain what is now an outdated model will surely lead to one inevitable outcome – declining business and ultimately extinction. Dramatic, maybe, but true nonetheless.

I actually don’t think Creative has gone far enough. While all product and pricing will be accessible to consumers, McGrath was adamant that the booking element of the technology would only be available to travel agents. Direct bookings from the public do not form part of the strategy, although he did leave the door open for development on that front further down the track.

The major reasons for Creative’s reluctance to accept direct bookings are two-fold. McGrath believes that dealing with agents and consumers requires different skills and his staff are trained to handle agent enquiries. I’m not sure I buy that. As a Creative res consultant you are required to know the product inside out so I don’t see the difference in dealing with an agent or member of the public.

Secondly, and this I imagine is Creative’s more pressing concern, is that should they open bookings to the public, a backlash from agents could result.

It’s easy for me to say, but that is a risk they probably will need to take. People want to book online, increasingly so, so not giving them the ability to do just that is surely counter-productive. All of Creative’s online competitors are open for business 24 hours a day.

Are Australian travel agents still not mature enough to understand and appreciate that companies such as Creative Holidays need a multi-channel distribution and booking strategy? The market demands it.

As McGrath quite rightly said, in today’s travel landscape, partners are competitors and competitors are partners.

Travel agents are quite happy to go direct to overseas suppliers to access cheaper product for their clients – in effect cutting out traditional wholesalers – yet it seems when those same wholesalers seek a new route to market, they are derided for it and branded traitors. It’s hypocritical.

The market has changed immeasurably, and the mindset of agents must change accordingly.