Laid-Off Travel Consultants Bring Loyal Customers Over to New Ventures — For Now

Travel agency groups whose business models cater to independent contractors are reporting a surge in new hires.

Global Travel Group and Travel Counsellors have reported a combined 230 new hires in the past 12 months, in part due to ongoing layoffs at larger travel agencies.

These new recruits, who work across the leisure and corporate travel sectors, continue to set up “micro agencies” and other types of coalitions — with loyal customers porting some business over to these new ventures.

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New York-headquartered Global Travel Collection, part of Internova Travel Group, has taken on 70 new travel advisors in the past six months, 25 of which are from the UK.

“The majority of the new independent contractors are coming with their portfolio,” said Angie Licea, president of Global Travel Collection. “I equate this to a hairdresser. When a hairdresser leaves their salon and they go to a new salon, they have this following of people who trust them. They don’t want anybody else to touch their hair.”

Global Travel Collection, which operates brands including Protravel, Tzell Travel Group and Colletts Travel, is relaunching its “New to Industry Travel Advisor Bootcamp” as a virtual event this month.

A New Format for Franchises

UK-headquartered Travel Counsellors, meanwhile, has taken on 160 new business owners in the past 10 months, 40 of which in its corporate travel division, Travel Counsellors for Business. That cohort has already recorded $1.4 million in sales between them since launching their business last year, the company said.

“Where they have come from has diversified, and we’re seeing more join from travel management companies,” said Kieran Hartwell, managing director, corporate, at Travel Counsellors.

As well as recruiting travel consultants, Travel Counsellors created a corporate business development division at the end of last year to cater for growing numbers of experienced sales executives who were being laid off.

“There was a lot of attrition and redundancies happening, so we thought it would be a great opportunity to keep talented people within the travel business,” said Hartwell.

The company recruited 10 business development managers, who grow their businesses through pitching to, and winning, new corporate clients. They work with other Travel Counsellors to fulfill those bookings.

The so-called micro agency model is also becoming popular at Global Travel Group.

“We’re seeing that maybe two or three agents were trying to function on their own, but now they’re creating a coalition, to share resources, and create micro environments,” added Licea. “They can join us as individuals, or as that micro environment.”

Defining Loyalty

With rising numbers of consultants going it alone, previous employers could soon start paying closer attention if they become impacted by significant drops in customers.

Booking travel can be emotive, and successful consultants will have built up relationships over several years. It’s natural for them to carry over those relationships, but former and new employers will now be looking carefully at those transitions, according to one legal expert.

“Clauses in employment contracts and consultancy agreements, known as restrictive covenants, typically stop a departing employee from working for a competitor or soliciting away the trade secrets and confidential information from the company,” said Ian Skuse, partner at law firm Blake Morgan.

Such bans typically prevent this for a period of 12 months, and client lists and contact details fall into the confidential information category, he added.

Last year, a UK High Court found former employees at Trailfinders, a UK travel agency had acted in breach of confidence when they joined a competitor, Travel Counsellors, in 2016.

“These cases show the dangers of the consultant poaching clients where this is forbidden by the contract of the first agency,” Skuse said. “Where there are a lot of consultants leaving, the employer is likely to take action,” he added.

However, when staff are made redundant, there is an argument the clauses become unenforceable, Skuse said. However, this is not automatic and consultants and employees should seek legal advice before contacting old clients.

With customer information a classic example of a trade secret, in the UK at least, former employees would also owe a “duty of confidence”, on the basis that disclosure of this information to a competitor would harm the former employer’s business. That duty of confidence is implied automatically between an employer and employees, even if there’s no mention in the contract of employment.

But again, if the employee’s relationship with their customers is particularly strong, customers are likely to follow them to the new company without any soliciting — which would not breach contract terms.

Global Travel Collection’s Licea predicts recruitment will only continue to grow.

“This is such a unique industry, because people have so much passion and love for it,” she said. “Not a lot of people want to leave, but they want to find a home they feel secure in, especially in this time when travel is so uncertain.”

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Photo Credit: Growing numbers of laid-off consultants are setting up their own micro agencies. Daria Shevtsova / Unsplash

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