Despite implementing one of the most major transformations ever seen in the travel industry and investing millions of dollars to secure its future, this week Creative Holidays finally buckled under the pressure of the immense changes being wrought throughout the travel distribution landscape.
A statement released by parent company The Travel Corporation on Tuesday confirmed news of Creative’s imminent closure and restructure.
However, the writing had been on the wall for some time.
In early 2013, then managing director Paul McGrath spoke extensively to Travel Weekly about the massive challenges the company faced and the necessity for it to evolve. The advent of the web and a whole array of online competitors had cluttered the market.
“It’s a challenging market, it’s very challenging,”McGrath said at the time.
“There are far more competitors in our space than there have ever been and because the market is so busy we have to make it as easy for agents as possible.”
As a result, the company commenced a massive overhaul, with it moving away from its traditional brochure-only wholesaler roots of static pricing and limited content to become a “hybrid” operation, adopting an online approach that catered to the changing needs of both agents and consumers.
At the centre of the transformation was a shift from the Calypso booking system to a new web-based platform powered by UK-based Travel Studios. The new platform, which launched in November that year, offered a broader range of product, dynamic pricing and enabled agents to dynamically package.
Flights also formed a major part of the new offering, along with a far wider choice of hotel product that promised to put it on a more even footing with the OTAs in the marketplace. Meanwhile, the introduction of dynamic pricing would enable agents to use Creative product to price match online competitors.
And by holding onto its static product, it could continue to cater to those consumers who did want to thumb through a brochure and pick out a traditional package.
The high speed in which the new technology would deliver product and pricing to agents would also make Creative more competitive, McGrath believed.
The ‘best of both worlds” model started well amid much fanfare. And when McGrath departed the company in November 2013 to take up a role outside the industry, he was credited with getting the business back on track for continued growth.
His replacement, James Gaskell, formerly of Travelocity, came with extensive online credentials which boded well for the digital evolution of the Creative brand. His arrival also coincided with the transition from Calypso to the new web-based platform.
Under Gaskell, the wholesaler unveiled its new travel agent website in May this year offering “user-friendly interface and search functionality”.
The new site aimed to simplify the booking process, taking it from 32 steps to just eight, according to Gaskell.
“We’re trying to create a consumer experience for the travel agent,” he told Travel Weekly at the time.
“Agent feedback has been very positive with regards to the new travel agent website, new-look brochures and improved customer service.”
Speaking at the Travel Tech conference in Sydney in October, Gaskell was still confident, citing success for the company’s efforts to “move the dial”.
While wholesalers had previously had superior knowledge which they communicated to consumers through brochure racks, the consumer now had more wants, needs and, importantly, the ability to do their own research.
The new trade website helped agencies “keep up” with the consumer while still making money, by delivering a consumer shopping experience to the consultant’s desktop.
“It doesn’t sound particularly game-changing, but believe me, it is,” Gaskell said.
The proof was in the pudding after all, and to back up his case study, he revealed a graph of sales from a “very large” consortium partner which showed a clearly upward trajectory of sales with Gaskell revealing the peak had held through the last two weeks of September – the most recent figures available to the wholesaler at the time.
However, despite the big reveals and the positive graphs, it appears the transformation simply wasn’t enough.
TTC Australia’s chief executive John Veitch branded the closure a “tough decision” which followed an “exhaustive” review of the brand over an extensive period of time.
“The fiercely competitive environment in which we now operate has made for a difficult business proposition for a mass generalist FIT independent wholesaler such as Creative Holidays, hence we have reached this sad conclusion,” he said.
“We wish to extend sincere gratitude to all of those in the industry that have supported Creative Holidays over the years and thank the team in particular for their unrelenting commitment.”
However, the company confirmed it would retain wholesale cruising arm Creative Cruising which had been moved to the Creative Holidays portfolio in April 2014. Indeed, Veitch confirmed that TTC continues to see “immense” growth in both cruising and niche specialist FIT operations.
“So our aim is to redeploy as many of the Creative Holidays team as possible into Creative Cruising and Adventure World, as well as other areas of TTC,” he said.
“We are currently working through this process with those whose roles have been impacted. It is absolutely our number one priority to look after our people.”
News of the closure shocked many within the industry, with some taking to online channels to voice their dismay.
One commentator by the name of Jean called it a “sad day” for the travel industry.
“We have just lost another iconic company,” she wrote. “One of the most innovative companies in the late 1980s who introduced the FIT product where the only option was package deals. Today is a very sad day but this is the way the industry is going.”
Rivals too took the opportunity to pay tribute to a “formidable competitor”.
Even as Qantas Holidays reported an enquiries spike as a result of the news, managing director Peter Egglestone spoke of its contribution to the sector over its more than 30 years in operation.
“Their presence has shaped the market and provided the continuing imperative for the ongoing evolution of the sector and our business,” he said.
Dan Nebauer of Inter Asia Holidays also lamented the news.
“You don’t like to hear this happening in the industry, even when it is a competitor,” he said. “Creative certainly were a competitive force against our own Asia FIT products.”
One thing is for certain – nobody can say that Creative didn’t give it its best shot. The time, effort and financial investment that would have gone into the company’s evolution must have been considerable.
But when the chips are down and the writing is on the wall, you cut your losses and move on. And with plenty of other thriving brands under its belt, that is exactly what TTC has done.