San Michele Travel - one of Australia's longest-established travel operators to Bali, stunned the travel industry last week with the announcement that it would cease wholesale tour operations and focus solely on retail travel.
The move, necessitated by the "effects of airline collapses and disruptions to its key destinations" means that San Michele will continue operations as a retail travel agency and that they will close their Melbourne Office. After the closure in August, San Michele will centralize activities to its Sydney office.
"All current wholesale bookings being handled on behalf of travel agents will be honored as we optimize efficiencies to ensure the continuing success of San Michele and maintain the highest levels of service that our clients have come to expect over more than 40 years," assured Ian Norris, CEO of San Michele
Pledging to bear the brunt of costs that "are well in the six figure range" caused by the collapse of Air Paradise, Ian made the difficult decision to restructure his company in order "pay the price of integrity by protecting its customers against losses."
balidiscovery.com caught up with Ian Norris in the days immediately following the dramatic announcement by his company.
Ian Norris: The Interview
balidiscovery.com Ian, let's get right to the point: Are you financially OK?
Norris: Yes. We are making the right decision now to ensure we are here for another 40 years. These actions are being taken because of the "perfect storm" of adversity hitting Bali over the last year or so – bombings, drugs and Air Paradise included. To pass through this storm and emerge in a fit shape and benefit from Bali's recovery, we have to trim our sails now and concentrate on the best parts of our business.
balidiscovery.com San Michele Travel has always had a mixture of retail and wholesale business. Why discontinue wholesale?
Norris: We have to reduce our costs. We are down nearly $5 million in sales to Bali year-to-date this year compared to same period last year and we also suffered a six figure loss due to the Air Paradise collapse. Wholesale brings with it significant overheads. With the decision to close our Melbourne office, our wholesale operation was the next logical area to cut costs.
balidiscovery.com What will you do with current wholesale bookings to Bali?
Norris: Those bookings held in our system on behalf of travel agents will be honored and processed in our normal professional manner. Any new requests for quotes from agents will not be accepted.
balidiscovery.com You personally have been a strong supporter of Bali. Will this continue if San Michele is a retail agent?
Norris: Absolutely! Now that we are focused on the direction we have chosen, being a retail agent gives us wider opportunities and avenues to promote Bali.
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