Luxury travel agency/owners around the globe, including Australia, have seen a shift in their authority as their businesses expand to incorporate independent contractors (ICs). According to Michael Londregan, Senior Vice President of Global Sales, Virtuoso, agencies have reported a switch from a “sphere of control, to a sphere of influence” as the IC model evolves.Speaking exclusively with LATTE following Virtuoso’s regional Forums across the world, which Londregan attended in person to almost all, he identified three key topics were dominating conversation. Each of the topics were in a “different lifecycle” according to their region, but all were prevalent.
“The same three topics seem to keep popping up, and the three words are getting overused, abused, misunderstood and confused,” Londregan explained.
Those topics are ‘independence’, the definitions of ‘luxury’ and ‘experiences’.“For me, somethings are just starting in Australia, but they’re quite mature in other areas. And some things are very mature in Australia, and just starting in other areas.”
“People are saying they want to dominate experiences. ‘We’re going to deliver experiences’. ‘We’re going to focus on experiences’.”“The second word, and it’s no surprise, is the word ‘luxury’. It’s been getting overused and confused for so long.”“And the third word is ‘independence’. By ‘independence’ they are talking about the democratisation of how the trade is working,” he said.“Globally, managers are coming to grips with the fact that they’re moving from business models that were about control – ie. ‘its my shop, you sit in my shop, there’s your computer, I tell you what to do, largely, you do it and I pay you – to; ‘You work with me. I provide you with some commercial terms. You make a lot of the decisions. I will try and guide you to make decisions that are aligned with my business and my brand. But at the end of the day, you are now your boss, and I am a platform of influence, not control,” Londregan said.“This concept is really dominating. It’s probably never been more confusing or harder to be an owner/manager of a travel business in this environment where you’ve lost all real control. ‘And if you tell me what to do, and I don’t want to do it, I’ll just leave you go to another platform’.
Continuing to speak from the third person, Londregan said: ‘If I decide I don’t want to work with the McGirken Scooters anymore, because they’re really annoying and they zap the life out of me, you can’t tell me to do it. I’m just getting rid of them. “If you tell me I have to sell product X, even though I don’t think it’s in the best interest of my client, and you force me to do it, and I lose my client, I’m not doing that. I’m just going to tell you I’m not selling X, I’m selling Y.”
“This is everywhere and it’s really creating a paradigm shift of owner management,” Londregan said.
“Managers are having to move from being in a sphere of control to a sphere of influence. That means they have to change their management style. They have to change their structures, and it’s everywhere.”Londregan estimates that Australia is likely only one-third of the way into that journey, in a global context.“So while Australia is about 33% in, America is closer to 80% of the way in. I believe that because America has had the independent contractor world for longer (because they had more disruption and they had to try and reduce risks) so they are further along in the lifecycle. They’re not ahead because they’re an advanced intellect. We just didn’t have as many disruptions to our business, and therefore we didn’t de-risk it as quickly.”He says a destination such as Asia is only 2% in. “But it will come as a freight train,” Londregan predicts.Londregan explains that agencies that operate an independent contractor arm of their business are ultimately de-risking their business by creating the platform, “but you’re losing a lot of control.”“How do you control your brand?”
“How do you control your standards?”
“How do you control your client service levels?”
“How do you control consistency in your business when you only have a sphere of influence instead of a sphere of control?”“It’s freakishly hard for managers,” Londregan contemplated.More from Londregan on the misunderstanding of Experiences in LATTE next week.
