Liam Lonergan, Managing Director, Club Travel, talks to ITTN’s News & Features Editor Neil Steedman about the agency, his best decisions (and his worst!), the state of the industry – and non-retirement. Club Travel is the largest agency in Ireland by turnover and by staff numbers and was the Leinster finalist for the 2014 ITTN Travel Agency of the Year Award.
Founded by Liam in 1971, Club Travel occupies a four-storey over basement property (which he owns) at 30 Lower Abbey Street, Dublin 1, and his small office is in the basement. A Budget Travelshop occupies the ground floor and basement in an adjoining property, while the top two floors in the other adjoining property are also leased. The agency’s Australian Holidays brand occupied premises on Eden Quay but moved into Abbey Street one year ago, while Eurasia, which specialises in the Indian and Pakistani sectors, has premises in Lucan and Cork.
“We moved into number 30 in 1975/76 and took a 35-year lease on the ground floor and basement next door in 1987 – so that has seven years left. No-one in their right mind would take a 35-year lease these days.
“We have kept to having just one location, and being right in the city centre on Abbey Street and the Luas line has advantages and disadvantages, but the main benefit is that it is very convenient for our staff. The number of people coming into the agency has reduced, but flattened out, as online and phone call clients have increased, as it has for many other agencies. However, the Budget Travelshop still receives a lot of callers.
“Not many agencies now have more than one major shop – and we are not a charter operator. We did consider opening Budget Travelshops in Cork and Limerick – we even had empty premises in Limerick available – but decided against it. We also questioned having the ground floor shop in Dublin and considered a first floor office – which it probably could be. Online works for dynamic packaging and the margins don’t really justify bricks and mortar.
Staff and Turnover
“We have over 150 staff, which at any one time would include 10 to 12 home workers around the country, who don’t look after geographic areas but handle specific corporate accounts. If you are a bricks and mortar agency it is important to have staff in the office, so there is a limit to how many home workers one might have, but when you have exceptional and reliable staff who can work from their homes and you have suitable IT systems then it doesn’t really matter where they are based.
“Our peak turnover was €120 million in 2007/08, but the recession brought a 38% drop. However, turnover has been over €75 million annually since 2009, for our last financial year to October 2014 it was €85 million, and this year’s turnover will be higher still.
“Yes, that will include the Government contract. We were getting business from Government Departments informerly from the early 1990s and were awarded our first formal contract in 1999. We were delighted to get it back in August 2014, having lost it two years earlier.”
When asked what he considers to be the best decisions he made over the past 44 years, Liam has no hesitation in replying: “First, my decision to go into the travel business – I love it and am good at it. Second, being an early starter with technology (our first mainframe computer) in 1981. Third, buying BTI Travelwise and Budget Travel.”
(Club Travel acquired the Budget Travel brand in February 2010 after a competitive tender. At the time, a genuinely surprised Liam told ITTN: “I really didn’t expect our bid to win! However, I look at every potential opportunity – and if you are not prepared to do that then you shouldn’t get out of bed in the morning.”)
“Also, while it is not a decision as such, I have had very good staff, including a number of people who have complemented me very well – such as Tom Glynn, who was exceptionally good at the technology and operational aspects, as is Coleman Burke.
“The travel business is now all about having good IT systems and reasonable volumes, because the margins are not great. So we are very focused on systems and Coleman is also very good at social media, which I do not get involved with in any great detail – and, no, I do not have a Facebook page or Twitter account!
“Since 1980 we have done a certain amount of programming inhouse and since 1999 we have had eight to 10 programmers / developers on average. Our main competitors are the multi-nationals with 200 programmers in India – and it is difficult to keep up with them!
“Coleman is very good at the things that I am not great at, but I have no shortage of ideas. For example, we have the registered trading name Holidays4U for online business in the UK market, but that is all about getting the technology right and our priorities. We haven’t launched the brand yet but we will ‘sooner or later’ – and it will be the reverse of what is currently happening, with UK OTA’s coming into the Irish market.
“Different currencies and the related back office functions are the biggest issue, as well as bonding in different jurisdictions. Borders have gone in this business and there should be EU-wide freedom of trade once you are licenced and bonded in one country. I have discussed this with the Department and the Commission for Aviation Regulation but there are a lot of different regimes – even between provinces in some countries – and there is no concensus on cross-border trading.
“In a sense one could say that Club Travel was consolidating from the very beginning in 1971, and we had a long-haul inclusive tour programme, but our first ‘offical’ appointment as a consolidator – and also their first – was British Airways in the late 1970s / early 1980s. This made the business very interesting because not many airlines had similar global networks at that time.
“We also became GSA for Virgin in 1985 and had a very good relationship with them for almost 20 years, including a reservations centre, ticketing at Dublin Airport, and operating the Dublin – London Luton route with Club Air.”
However, Liam considers his decision to start up Club Air, which operated B727s from 1987 to 1988, as the worst he has made in his otherwise successful career – and his office wall includes a large picture frame with three Club Air photos. “They are a constant reminder of my folly and a warning not to lose the run of myself again!
“It did seem to be a good idea at the time. I worked on the basis that if one made 51 good decisions and 49 bad ones then you were ahead of the posse. However, I forgot that you also need to consider the size of each decision – if just one of your 49 bad decisions is a really bad one, then that can outweigh 51 good ones! Despite what some people might think, I am risk averse.”
Two other items in Liam’s office may also hint at his working philosophy. On his desk is a quote by Mario Andretti: “If everything seems to be under control, you’re not going fast enough” while on the wall behind him is another by Henry Ford: “If I had asked people what they wanted they would have said faster horses.”
“Club Travel became a member of the Irish Travel Agents Association in the late 1970s – 1979 I think, so it took eight years to become a member.” (A long debacle between Club Travel and the ITAA entered the High Court in December 1975.) “The ITAA bond was a hugely important benefit to agencies then, but, of course, that benefit disappeared in 2011. However, we are still an ITAA member and it is important to have a trade association – the legal information provided is the main benefit for us nowadays, and the ITAA is a useful mouthpiece for the trade.”
Does he still have any aspirations, as the biggest travel agent in Ireland, to be ITAA President? “No! I did stand for election in 1986 but, while the votes were not announced, I understand that I came third in a three-horse race and the sting of the rejection still stays with me – they missed their chance! Besides, I am not really a committee person so I am happy to see others on committees and taking official roles.
“We were also a founding member of Worldchoice Ireland in 2001 and we are still a member. I had hoped that other members would have been more supportive of the products that we then had – more so than now. There are some benefits to us of being a Worldchoice member, but perhaps not so many for Club Travel as for other members.”
The Industry’s Future
So how does Liam view current and future prospects for the Irish travel trade and for Club Travel? “I tend to say it as I see it – and that has worked 95% of the time. Administration, or more accurately the lack of it, is the killer in this business. I have tried to focus on every single aspect of where money can be lost, mislaid, wasted, etc – and I hope I have succeeded.
“The big chipping away at the travel agency business by online operations has already been done, whether it be by airlines and others dealing direct or by OTAs etc – we don’t have to wait for the likes of Google and Apple to move in. Do I like it? No. Can I do anything about it? Not a huge amount!
“The traditional travel trade, as in bricks and mortar agencies, is in decline – surpassed, at a greater or lesser pace, by online. Business levels are not going up. The best-case scenario is that it remains flat, the worst that it is on a downward trajectory, and the customers will have the final say.
“In the medium term I am optimistic about the future for Club Travel, but not for the industry. As for the long term, I haven’t a clue!”
Retirement or Succession?
Liam is now 65 years old, so has he considered selling the business, retiring or succession (his step-daughter Sharon and son Carl work in Club Travel)? “Well, I don’t need to sell the business for the money and, besides, nobody has ever made me a serious offer for it.
“I don’t think about succession too deeply, or at all about retiring. If you like what you do, and you are good at it, why not keep doing it? It’s like breathing. There is only so much time that one can spend playing golf or tennis or drinking. I gave up golf because I was getting bored after 12 holes, but I still play tennis a couple of times a week and drink about two bottles of wine a week.”
Holidays? “Yes, my wife Helen and I take lots of weekends during the summer, mainly in Europe, which offers wonderful drives and history. We also spend Christmas in Phuket and onwards. I used to say that I would never visit the same place twice, but Phuket became the exception and we combine a stay there with seven to 10 days somewhere else, such as Laos, Cambodia or Australia.”