DESTINATION Asia said it does not see a huge account fly by overnight, rather is prepared for the eventuality when Flight Centre switched to Buffalo Tours following the joint venture between the two to establish a regional DMC.
Flight sends around 300,000 clients to Asia a year, an immediate boost to Buffalo which, in Vietnam, Cambodia, Thailand and Myanmar, handles 120,000 pax a year, according to CEO and founder Tran Trong Kien.
With the JV, which saw the opening of Buffalo in Singapore yesterday, Kien expects to handle more than 500,000 pax a year throughout Asia, where Buffalo will also sprout in Bali in two weeks’ time and in Malaysia, Hong Kong, China and Japan within eight weeks, he said.
However, a source believed some of these offices might be delayed due to sticky travel agency application processes. Still, Buffalo said it handled Flight in countries like Thailand from October 1 last year, now Singapore and “the rest from April 1”.
In Singapore alone, Flight sends 55,000 to 60,000 pax a year, said Buffalo’s regional general manager Singapore & Malaysia, a former executive of Pacific World.
Asked the impact of the account movement on Destination Asia, which handled Flight for five years, James Reed, CEO/group managing director, said Flight had given it a year’s notice that it would be moving the business, enabling the firm to source other markets.
Said Reed: “Firstly, I have the deepest respect for Flight Centre and I wish them well. Graham Turner is a true entrepreneur and a great Aussie.
“Flight Centre was very generous and gracious in letting us know that they would be transferring their business to a new ‘inbound DMC’, so we had 12 months’ notice. This long notice period enabled us to source new business via our ISO (international sales offices) network in New York, Chicago, London, Sydney, Johannesburg, Auckland, Dusseldorf (and a new office in Brazil this year).”
Reed said Flight’s business, though high volume was “at a very low price point per pax”. While the new business Destination Asia has secured could not replace Flight’s volume it has higher margins, he said, adding “2015 will be an excellent, near record, profit year for the Destination Asia Group”.
No offices are closed as a result of the loss of Flight Centre, Reed added.
Rather, staff count is now over 630, compared with 575 when the DMC handled Flight, due to new business.
“Our ‘three legs’ business model – MICE , tour wholesalers /tour operators and cruise ships – continues to deliver significant cross-selling among the 33 operating offices in the 11-country Destination Asia network . In addition to an almost record 2015, we are signing further new business customers and 2016 will be an additional 25 per cent growth over 2015,” Reed said.
“Our outbound business ex Destination Asia China and our new inbound India division have also added substantial new dollars to the bottomline profit of the Destination Asia Group.”
Meanwhile, a major new “partnership” in a major US city will expand Destination Asia’s American presence. Reed is expected to announce this tie-up next Thursday.
