There’s been an interesting debate raging over the last few days following Adventure Tours Australia’s announcement it is closing Western Australian budget touring brand Planet Perth. The general consensus seems to be big corporates are evil, don’t understand the budget travel market and backpacker businesses are much better off in the hands of small, local operators who are able to get, and stay, close to their customers.
This analysis has the benefit of playing to the ‘little Aussie battler’ fraternity, but has the disadvantage of being a load of bollocks.
The idea that TUI – the European travel giant which has been sending boozed-up Brits to Spain on cheap package holidays for decades – doesn’t understand budget travel is frankly laughable. Trust me, mainstream tour operators in Europe know all about thin margins, piling it high and selling it cheap.
What companies like TUI bring to the table is massive distribution channels and an operating professionalism often lacking in so-called lifestyle businesses. They also know plenty about customer service, with CRM technology far in advance of anything in the backpacking sector, and a commitment to sustainable development which was forged long before it was the trendy thing to do.
As an industry, we should welcome any company which drives up standards, no matter how big or small it is.
What TUI doesn’t have is local knowledge of the Australian backpacking sector – which is why, when it acquired ATA, it kept the existing management team in place. Is anyone seriously suggesting Ken Hart and Greg Zammit don’t know what they’re doing?
In this case, it was TUI’s misfortune to buy into the sector just before the GFC ripped the guts out of it. Planet Perth isn’t the only WA business to suffer from a downturn in customers in 2010. I don’t suppose Tourism WA’s apparent indifference to the backpacking industry helped much either.
But that doesn’t make it evil, stupid or incapable of operating niche businesses in local markets. After all, that’s what it’s been doing – mostly successfully – for years.
My guess is many of those lining up to say ‘I told you so’ now would happily throw in their lot with the next TUI that comes along waving its chequebook.