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My Travel and multi agencies - are they needed?

My Travel is a multiagent. What is that? This is an agent who under own name gathered other agents who sell tourist touroperators’ offers  through him and on behalf on him. This is the shortest definition of a multi-agency. A few years ago, this form of activity quickly gained popularity among businesses men. The initial success of precursors, encourage others to follow their footsteps. And  moreover, the project appeared to be fairly easy. At minimum cost and - what it is especially attractive - without having to deal everyday with arduous selling of tours and providing  steady income.

The work must have been involved only at the beginning of the business. Later, it was supposed to be a child's play. In short: the activity - the dream. First task for a multi-agent starting its adventure is to contact the tour operators to get their agreement to cooperate. It is important  to have that these tour operators as much as possible but even more important is to find industry leaders among them, such as Itaka, Rainbow Tours, Neckermann and fondest dream - TUI (extremely difficult), Exim, Wezyr and the like. And this is the most difficult stage.

My Travel multi agentIf you manage to complete it successfully, then having the promise of opportunities to sell a candidate for being a multiagent begins searching for travel agents, which encouraged by an opportunity of selling tours organized by major tour operators would not like to do so under their own name but using the multi-agent’s logo.

The proposal, often seems to be attractive, especially for the newly opened agencies. And although there are no guarantees that the biggest tour operators approve a proposed point of sale (always agreements between a multiagent and a tour operator includes a right of the latter to verify the proposed points of sale), it gives a chance that some of the organizers such consent will express allowing easy and quick start-up as a travel agent.

Multi-agents, presenting a multitude of benefits that will flow from a contract signed with them which means a resignation from branding,  with surprising ease can convince many agents to their idea. This creates a multi-agency network which consists of – usually - a few dozen offices. Each tour sold by an agent brings his "headquarters" a commission. Unfortunately, in such cooperation, most agents are rookie and their sale does not have impressive size and the commission for "headquarters" can be miserable.

Multi-agents try to remedy this in two ways. First, they try to encourage agents more firmly rooted in the market and having already some successful sales to the entry into its network. But this is not an easy road. Secondly, most often they require from new agents, which are within their network, an entry fee.

Entry fee, in the case of My Travel, is 30,000 PLN (7,000 EUR). My Travel has 93 agents cooperating with them. Almost three million zlotys (700,000 EUR) the company earned from the mere entry fee. This revenue, however, was spread over a long period of time and, in addition, part of it was spent on office equipment. But the company's CEO, Damian Ozga, announces the opening of another 30 sale points, which will bring 900,000 PLN (210,000 EUR). It also intends to extend its activities to Czech Republic.

I wonder why? Has he found out that he could not  easily enlarge the network only among offices in Poland? Why? After all, there are over 3,500 tourist agencies in Poland. Most probably majority is not
willing to benefit from the "common" promotional campaigns, negotiations with suppliers, etc. Actually, neither of the actions is “common”. Only multiagent runs them and always on behalf of itself.
Characteristically, Mr. Ozga, in an interview with rp.pl, speaking of agency offices belonging to his network, uses terms "another salons", "successive points." As if they were not separate legal entities and business partners but My Travel’s own shops.
The agent working under the name and on behalf of another brand bear normal - like everyone else - business risk but not on its own behalf.

How much such an agent can earn? Not all may expect bonanza. Mr.Ozga said that his company  is expecting a revenue of 75 million PLN (18 million EUR), honestly informing that a large part will be achieved by increasing the number of "salons". The agency commission from this turnover will amount not more than 7 million PLN (1.7 million EUR). There are 93 agencies in the network. Thus average revenue is 70,000 PLN (17,000 EUR) per agency. Unfortunately, not all off the agents will reach the average…

The early flourish of multi-agents’ activity (several years ago) was hampered by a series of spectacular and quite unexpected failures of leading multi-agent companies. “Origami”, “Multita”, “OstanieMiejsca” disappeared. All of them  used to have a strong position in the market in Poland. Today, a group of multi-agents is not expanding any longer. I think the market has reached its maximum, although multi-agency network do not include more than 300-400 offices (totally), which in comparison to 3,500 travel companies is an unimpressive number. No wonder that My Travel is looking for further volunteers abroad.

 

September 24, 2015