Triton conference special: Consortia in talks over full merger
Triton will push through a full merger of its three member consortia – if they can all agree on the best way to make the change.
On the first morning of the conference, Global founder and Triton advisor George Begg put forward a compelling argument for a merger, telling members they would be better off and claiming it would pave the way for a floatation and the raising of £20 million in the process.
He also said that a typical agent selling mass-market holidays could earn around £30,000 additional profit each year.
But his speech was preceded by a dramatic statement from Worldchoice chairman Colin Heal, who stressed nothing had been decided.
Taking to the floor at the request of moderator Alastair Stewart, Heal said: “There has been considerable speculation about a merger and discussions are taking place to consider if the time is right for a merger, but no final decisions have been taken.”
Heal promised members and shareholders would be fully consulted on a merger and that 75% of members would have to vote in favour for it to go through.
When Begg spoke, he stressed that saving overheads was not a good enough reason for a merger. He said there needed to be additional benefits for members and their interests had to be safeguarded.
He said his vision was of a virtual vertically integrated company, which did not have the costs of owning airlines and accommodation. He said members would control the distribution and there would be a balance between supporting Triton Holidays and third party suppliers.
“Could we be in the top three groups in the country? It has that potential,” he said.
“We could float in three years´time and raise £20 million and that money could be used to improve peoples´businesses.”
He said that, post-merger, an agent selling mass market holidays could expect to sell £200,000 worth of extra business. As average Triton commissions in this area, after discounts, were 12%, this would bring an extra £24,000 of commissions. In addition, an agent could increase its margin on £100,000 worth of business by six per cent by switch-selling from other operators, to gain a further £6,000 commission in a year.
Begg also said he envisaged a new way of working.
“How about a joint tour operator programme with a partner where we take a bit of the risk? What about chartering a whole aircraft rather than just taking seats?”
He added a float would allow Triton to fund a national advertising campaign that would lead to greater footfall and business.
Begg said the big question was how the three consortia would merge and claimed that they had to take the ´best practice´, or best parts, of each consortium.
“We could have a membership layer controlled by members and a commercial layer to produce business opportunities.”
Begg said growth targets would be ambitious and the newly-merged consortium would operate in many different segments.
“We´re excited by the prospect of a merger,” he said.
by Jeremy Skidmore (www.jeremyskidmore.com)
Jeremy Skidmore
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