Magellan looks beyond former 100-agent goal

Magellan looks beyond former 100-agent goal
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Magellan Travel Group has abandoned plans to limit membership to 100 agents as it outlined ambitions to expand beyond that target over the next three years.

Attracting more corporate agents’ will feature among the network’s growth strategy with management expecting combined total transactional value to rise 25% to $1 billion by 2017.

Magellan chief executive Andrew Macfarlane denied there was ever a genuine cap on membership but admitted it may have “overplayed” the 100-agent target.

Earlier this year, Magellan said it would effectively become a “closed shop” when membership targets were hit, a message it was now anxious to change.

But Macfarlane said it was not altering its strategy and stressed Magellan remained wedded to its long held mantra to be a “niche and exclusive” group of high performing retailers.

He also denied that a belief it could pick up disaffected Jetset Travelworld agents was behind the increased membership target.

“Saying we want 100+ agents is to correct the perception that we were a closed shop,” he told media at the conclusion of the group’s conference in Noosa. “We don’t want to convey the message of a closed shop because we do not intend to be a closed shop.

“The purpose of talking about 100 agents was to say we don’t want to be a group of 200, 300 or 500 agents. Frankly, 100 was an estimate but maybe we overplayed the 100 figure.

“But this is not a strategy change. We want to remain a niche group and an exclusive group.”

No membership targets are in place other than to grow to “100+” over the next three years, he said.

Magellan currently has 68 agencies, a number that will grow to 74 across 91 outlets by January 1.

While enquiries have increased since JTG announced plans to rebrand to Helloworld, Macfarlane said that would not affect its rate of expansion.

Retailers must be the right fit, and there are limited agents in the market who will be suitable for Magellan, he said.

Macfarlane and Magellan chairman Andrew Jones also rejected suggestions that management will look to exploit the unrest within JTG and create a hit list of prospective members.

Recruitment will continue to operate on a referral basis with no “cold calling”.

“We are not being opportunistic,” Jones said. “People [JTG agents] are now having a closer look at their options because they are being forced to make a pretty big decision. It’s obvious they are going to look at the alternatives.

“Over the last couple of days I’ve had 10 members come up and say you need to speak to X, Y and Z. That’s where our growth comes from.”

Macfarlane argued that approaching prospective members may create the wrong impression.

“If you knock on someone’s door, by implication that person is going to think “where is the special deal or the tweak” and that is not our model,” he said.

“It’s not as if we are invisible, people know who we are. We think it’s better that agents make an enquiry because if someone enquires they have already given some thought into whether there is a fit between their business and Magellan.”

Magellan’s “transparency” over its commercial deals remains among the biggest draws for members, and was also key for suppliers, he added.

“Suppliers have paid incentives to get leverage with the people who produce the revenue for them and for that to happen the incentives have to be transparent. That has been the game changer,” Macfarlane said. “I wish we could have trademarked the word transparent.”

Turning to its new corporate drive, Macfarlane said it wanted the group’s TTV to be split evenly between leisure and corporate by 2017. Currently only about 15 of its members have a corporate focus, generating about 20% of group TTV.

Magellan announced at the conference that it has signed a global partner program with Canada-based Uniglobe Travel International to “enhance the membership package” for corporate agents.

The recruitment to the Magellan board of Penny Spencer from Spencer Travel Group and Carl Buerckner from Platinum Travel Corporation will also provide a boost for its corporate division, Macfarlane said.

“What Penny and Carl bring to the board, apart from profile, is expertise,” he said. “They are very experienced corporate agents who will tell us what they think a TMC will be looking for, and that’s what we will create.”

Next year's conference will take place in Canberra between October 29 and 31.

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