Travel is next on Warehouse radar

Deal could put Oz supplier in collision with NZ franchises.

It's where everyone gets a bargain ... and now travellers might be able to book their next holiday at The Warehouse.

The retail giant is in negotiations to sell online cut-price international flights and holiday packages through big Australian airfare discounter Best Flights.

The deal is likely to be offered alongside other Warehouse services like credit cards and will enable Best Flights to target the approximately 80,000 customers a week who visit a Warehouse outlet.

Best Flights is owned by Australian travel giant Stella Travel Services and operates an online booking site and telephone booking services throughout Australia.

It has an annual turnover of about $A150 million.

But the move could put Stella in collision with its New Zealand retail franchise chains Holiday Shoppe, United Travel and Travel Smart.

Many Holiday Shoppe franchisees are already disaffected by what they see as Stella's failure to produce independently audited accounts and to properly disclose the amounts of commissions paid by travel suppliers such as airlines and wholesalers.

They say Stella's proposed Warehouse deal will cannibalise their thin margins further by setting up in effective competition with Stella's own shop-front retailers.

The fear seems borne out by recent travel industry promotional material distributed in Australia.

"We are the High Street travel agent's worst nightmare," screamed Best Flights' headline. "At Best Flights... we continually strive to put together discounted air fares and find `hidden fares' that lurk in the deepest corners of the airlines' darkest closets...

"At Best Flights we are just sad workaholics who sit at our computer screens through the night and the weekends to ensure we bring the best deals to the Australian public."

Last week Stella is understood to have told staff it intends breaking its contract with the global online booking agent it currently uses, Zuji.

That would presumably clear the way for it to use its own subsidiary, Best Flights, as its prime online booking agent in preparation for The Warehouse deal.

When Stella bought Gullivers, the $235m travel company founded by entrepreneur Andrew Bagnell, last December it picked up the licence for Zuji as part of that deal.