When growth stalls in travel and travel insurance, the cause is usually a commercial architecture that has drifted away from the strategy, and more effort applied to that architecture buys motion rather than momentum.

An analysis of structural drift in travel and travel insurance businesses, the five drift points behind most stalled growth, and how to diagnose them and sequence a structural reset that lasts.

By Matt Endycott, Founder and Managing Director, Hartmann Advisory

Executive summary

Stalled growth in travel and travel insurance is rarely a sign that people have stopped trying. Far more often it signals that the commercial architecture, meaning the incentives, channel roles, partner economics, governance and operating model that turn effort into results, no longer matches the strategy. The instinctive response of more reporting, more campaigns and more sales pressure then treats a structural problem as a motivational one, and the business buys motion without momentum.

The timing makes this more pressing. Channels have multiplied across retail, direct, embedded, aggregated and partner-led distribution, each with its own economics and behaviour. Post-pandemic rebound demand flattered performance for several years and is now normalising, exposing structures that growth had been covering for, while margin pressure and consolidation raise the stakes of every structural inefficiency.

This analysis identifies five points of structural drift behind most stalled growth, namely incentive drift, channel cannibalisation, portfolio opacity, governance debt and operating-model lag. Drift is locally rational, because every team is responding sensibly to the structures around it, which is why effort cannot correct it and leadership rarely sees it forming.

The way back is a structural reset carried out in sequence, with activity re-applied only once the structure can convert it. The analysis also shows how to diagnose drift with data most businesses already hold, how to measure net new value by channel and how to hold the reset in place.

It is written for CEOs, general managers and distribution and partnership leaders at airlines, retail travel groups, wholesalers, tour operators, loyalty programs, tourism bodies, insurers, underwriting agencies and financial institutions. It reflects 25 years spent leading travel and insurance distribution from inside the sector, as Head of Travel at Allianz Partners, Head of Distribution at nib Travel and Head of Partnerships at Europ Assistance, now Redion, including a five-market transformation that delivered a 12% attachment uplift in New Zealand and 4% in Australia.

In brief

• Responding to slowing growth with more reporting, more campaigns and more pressure treats a structural problem as a motivational one.
• Five points of structural drift do most of the damage, namely incentive drift, channel cannibalisation, portfolio opacity, governance debt and operating-model lag.
• Drift is locally rational, which is why effort cannot fix it and why leadership rarely sees it forming.
• By the time a slowdown is visible in results, the structural cause is usually already embedded, because the numbers are a lagging indicator of the architecture.
• The evidence needed to diagnose drift usually already sits inside the business, in payout reports, partner terms, customer records and escalation patterns.
• Sustainable growth returns when structure is realigned to strategy first and activity is re-applied second, and the order of those steps is itself the strategy.

Why growth stalls in travel and travel insurance

Travel and travel insurance are execution cultures. Results are made booking by booking and policy by policy, and leaders are used to moving performance by moving activity. That instinct served the sector well when the commercial model was simpler, with fewer channels and clearer lines between them.

Rising demand then hid a shift in where the constraint sits. When volumes are growing, a channel that takes customers from another still adds to a rising total, and an incentive plan aimed at an outdated objective still pays out against rising sales. Once demand normalises, the architecture has to carry the business on its own, and the gaps between structure and strategy start to show.

The activity trap

When growth slows, most businesses respond with more activity, as reporting becomes more frequent, sales pressure intensifies, campaign calendars fill and partner meetings multiply. The instinct is understandable, because effort is the lever leadership can pull fastest.

It is also, often, the wrong lever. Applied to a structural problem, additional activity produces motion without momentum, and it carries real costs. Team fatigue sets in, discount creep follows as sellers strain for targets the structure cannot support, partners grow irritated at intensified demands, and a heavier reporting burden consumes the hours that should be spent selling.

Each round of extra effort that fails to move results also erodes confidence in a strategy that may have been sound all along. By the time the slowdown is visible in the numbers, the structural cause is usually already embedded, because results are a lagging indicator of architecture.

Why structural drift is rational and invisible

Structural drift is dangerous because at every local point the behaviour looks sensible. The retail team defending its book against the direct channel is doing its job. The partner optimising toward last year’s commission structure is responding to the contract it was given, and the channel lead reporting progress against channel targets is telling the truth. Nobody is failing, yet the pieces have simply stopped adding up to the strategy.

That is why drift rarely appears in performance reviews and why effort cannot correct it, since the organisation is already trying hard at objectives the architecture set some time ago. Each decision behind the drift, whether a commission plan written for a volume era or a governance model built for a smaller portfolio, was reasonable when it was made. Nobody decides to let the architecture fall behind the strategy, which is precisely why nobody notices when it has.

Growth rarely stalls because people stopped trying. It stalls because the commercial architecture stopped supporting them.

What causes stalled growth in travel businesses

Across travel brands and travel insurers, five drift points account for most stalled growth. They rarely appear alone and tend to reinforce one another, so a business that finds one should expect to find others nearby.

Incentive drift, when pay and strategy disagree

Incentive drift occurs when the strategy has moved toward premium mix, embedded distribution, partner-led growth or digital conversion, but compensation and channel behaviour remain tied to the objectives of a previous era. In a retail travel group, consultants may still be rewarded on volume while the strategy calls for attachment quality. In an insurer, partner commissions may still reward volume the strategy no longer prioritises, while the products it most wants to grow earn no more than the legacy book.

It shows up when strategy decks describe one business and commission statements describe another. Every point of disagreement between the two is a place where the organisation is paying people to pursue something other than its strategy, which makes incentive alignment the first real test of any commercial growth strategy.

Channel cannibalisation and portfolio opacity

Channel expansion can quietly redistribute value instead of creating it. Direct channels weaken retail performance, embedded pathways erode traditional attachment and new alliances duplicate effort in core markets. The signature is that every channel reports progress while aggregate growth stays flat.

Cannibalisation persists because of a second drift point, portfolio opacity. When leadership cannot see where value is actually made and lost across partners, products and channels, decisions default to anecdote and the loudest channel wins resources the economics would not justify. It shows up when resource debates are settled by advocacy rather than evidence.

Governance debt and operating-model lag

Governance debt builds when decision rights, escalation paths and partner-management disciplines designed for a smaller, simpler business are still carrying a larger and more complex one. Cross-channel trade-offs escalate to the CEO or to nowhere, exceptions multiply and partners learn to shop for answers.

Operating-model lag is the organisational version of the same problem. The structure still reflects how the business used to make money, so new propositions run through teams, systems and processes designed for the old ones. It shows up when the newest growth priority has the fewest dedicated resources and the most borrowed ones.

The first move for each drift point is deliberately modest. Each can be completed with information the business already holds, and none needs to wait for a wider reset to be agreed.

Drift point	The first move
Incentive drift	Put the current strategy beside the current internal and partner incentive plans and list every point where they disagree.
Channel cannibalisation	Measure net new value by channel, counting growth only after subtracting what each channel took from the others.
Portfolio opacity	Build a single value map of premium, commission and margin flows by partner and channel, then maintain it monthly.
Governance debt	Name the owner of each cross-channel trade-off and give one forum the authority to settle it.
Operating-model lag	Trace the newest proposition end to end and count the handoffs into structures built for something else.

 

How to diagnose structural drift with data you already have

Diagnosing drift rarely requires a new system or a lengthy data project. The evidence usually sits in finance, partner management, booking and policy systems and the diaries of senior leaders. What is missing is the decision to read that evidence against the strategy as a whole rather than one channel at a time.

Reading drift in records the business already keeps

Each drift point leaves a trail. Incentive drift is visible in payout reports, where the question is what the highest-paid sellers and partners actually sold and whether it matches what the strategy says matters. Portfolio opacity reveals itself when finance, distribution and partnership leaders give different answers about where the business makes and loses margin, or reach the same answer from different numbers.

Governance debt shows up in escalation patterns, such as a growing exceptions register, partner terms that vary for reasons nobody can reconstruct and a CEO routinely asked to settle disputes between channels. Operating-model lag can be read from the resourcing plan. Where people and budget sit apart from where the strategy says growth will come from, the organisation chart is still describing the old business.

Measuring net new value by channel

Channel reporting typically counts gross volume, which is why every channel can show progress while the total stands still. Net new value asks how much of a channel’s growth would not have happened without it. Answering that means matching customers across channels using identifiers the business already holds, such as loyalty numbers, booking references and policyholder details, and separating genuinely new customers from those who have moved from another channel.

Two refinements make the measure useful. Movement should be valued at margin rather than revenue, because a customer who shifts from a retail consultant to a direct website or an embedded booking flow changes commission flows, cost to serve and partner economics even when the headline sale is unchanged. Directional accuracy is also enough to act on, using comparisons across regions, segments or periods where a channel was or was not active, rather than waiting for a perfect attribution model.

How embedded and direct channels interact with retail and partner channels

The most common cannibalisation pattern runs between newer and older channels. When cover or ancillaries are offered inside an online booking flow, the moment of sale moves earlier, and a consultant or partner who speaks to the same traveller later often finds the decision already made. Attachment in the traditional channel then declines, and the decline is usually read as a sales problem when its cause is structural.

The same dynamic takes other forms across travel distribution strategy. A travel brand’s direct website can draw customers from its own store network, a loyalty program can compete with the booking path it is meant to support, and an insurer’s direct brand can compete for the same travellers as the partners that distribute its white-label products. None of these channels is wrong to exist. The problem arises when nobody has defined which customer, moment and proposition each channel is for, where it should deliberately defer, and how credit is shared when a customer moves between channels.

In travel insurance distribution, those rules belong in the partnership agreement as well as the internal plan. Partners tend to feel redistribution in their own results well before it shows in an insurer’s aggregate numbers, so clear channel roles protect the partnership as well as the portfolio.

Why leaders misdiagnose stalled growth in travel

Attachment decline, weaker conversion and softer momentum are usually blamed on pricing, proposition or sales intensity, because those are the visible surfaces of performance. Sometimes those factors matter. Just as often they are symptoms, and the cause sits in the surrounding architecture, whether that is unclear channel roles, weak partner economics, inconsistent governance or an operating model the business has outgrown.

The misdiagnosis is expensive twice over. The business spends on campaigns and pricing actions that cannot fix a structural constraint, and the true cause compounds for another cycle while confidence in the strategy erodes.

Separating demand, proposition and architecture

A useful discipline is to require, before approving any response to a slowdown, that the diagnosis states explicitly whether the constraint is demand, proposition or architecture, and what evidence separates the three. Demand constraints show up in market data and tend to affect competitors as much as the business itself. Proposition constraints show up in competitive loss, where customers and partners choose alternatives on product, price or service.

Architecture constraints show up as internal contradiction, such as channels that each report growth while the total stays flat, or incentives that pay for one strategy while the board approves another. That is exactly why they are the constraints nobody volunteers, because every function can explain its own results and no function owns the contradiction between them.

In practice, a distribution business that worked harder

Consider a travel distribution business whose growth had flattened after several strong years. The response was textbook effort, as weekly performance calls became daily, campaign frequency doubled and a new reporting suite tracked activity in fine detail. Twelve months later growth was still flat and the front line was visibly tired.

The eventual diagnosis found nothing wrong with effort. A recently scaled direct channel was sourcing most of its volume from the retail network’s customers, partner commissions still rewarded volume the strategy no longer prioritised, and no forum owned the trade-off between the two channels, so both kept investing against each other. The reset clarified each channel’s role, rebuilt partner economics around the actual growth model and created a single portfolio view with an owner. Activity levels were left unchanged, and growth resumed because effort was finally flowing through a structure that could convert it.

Illustrative composite drawn from patterns observed across the sector, not a description of any single business.

How to fix stalled growth with a structural reset

Sustainable growth returns when the business realigns structure to strategy, deliberately and in sequence. Each step depends on the one before it. Channel roles agreed without a shared view of value flows are settled by advocacy, and economics rebuilt without clear channel roles end up paying for conflict.

The sequence of a structural reset

• See the value flows first, with a clear map of where premium, commission and margin actually move across channels and partners, because everything else depends on that view being accurate and shared.
• Clarify channel roles by setting out what each channel is for, where it wins and where it deliberately defers, so that expansion creates value instead of redistributing it.
• Realign the economics by rebuilding partner terms and internal incentives around the growth model the business is actually trying to run, because until the money moves, the strategy remains advisory.
• Reset governance so that decision rights, escalation and portfolio review disciplines are sized for today’s complexity, with fewer forums, clearer owners and visible decisions.
• Then re-apply activity, pointing campaigns, cadence and sales intensity at a structure that can now convert effort into growth.

The order matters as much as the content. Activity applied before the reset pushes more volume through incentives and channel conflicts that are already working against the plan, while the same effort applied afterwards finally shows up in results.

Holding the reset in place

Drift is a continuing tendency rather than a single event, because strategies keep moving and structures keep lagging behind them. Holding the reset depends on a few disciplines that make structure part of the ordinary management rhythm.

• The value map needs a named owner and a permanent place in the executive pack, so that net new value by channel is reviewed as routinely as revenue.
• Channel roles should be written down and revisited whenever a new channel, partner or proposition is launched.
• Incentive plans and partner terms should be tested against the strategy at each planning cycle and contract renewal, so that the commission plan changes when the strategy does.
• The cross-channel forum should keep a visible decision log, because a forum that cannot point to a decision it changed has become a reporting meeting.

The early signs of renewed drift are usually the signals that revealed it the first time, such as rising exceptions, more escalations to the CEO and channel reports that diverge from the aggregate. They tend to appear before results turn, which makes them a better early warning than the results themselves.

Activity applied before structure amplifies the drift, while activity applied after structure compounds the fix.

Implications

For travel insurers

• Measure each partner, embedded arrangement and direct brand on net new value as well as gross written premium, so that growth drawn from your own partner network is visible rather than celebrated.
• Test partner commission structures against the growth model you are actually pursuing, and renegotiate where terms still reward the volume of a previous strategy.
• Define where your direct brand competes with your distribution partners and where it defers, and give that trade-off a named owner, because partners who cannot get a clear answer will shop for one.
• Give embedded and partner-led propositions dedicated capability rather than borrowed resources.

For travel brands and distributors

• Define the role of each channel, from stores and consultants to direct digital, embedded booking flows, loyalty and partner alliances, including where each should defer to another.
• Read consultant incentives and partner terms against the current strategy, and resolve every point where they disagree.
• Ask insurance and ancillary partners for reporting detailed enough to build a single value map, rather than accepting channel totals that hide redistribution.
• Treat every new channel or alliance as a structural decision, and know before launch what it will add and what it will take from existing channels.

For boards and executive teams

• The CEO should treat the stall as information about the architecture before treating it as a verdict on people, because the reflexive leadership change often replaces the one person who had just diagnosed the real constraint.
• The CFO should treat the value map as the control instrument and fund visibility first, since it is the cheapest item on the reset list and it de-risks every other decision.
• The distribution leader should recognise that channel-role clarity is what makes every team’s job winnable, because ambiguity that feels like flexibility is usually the source of most internal conflict.
• The people and reward function should approach incentive redesign as strategy work rather than administration, because the commission plan is the strategy the front line actually reads.

Questions for the leadership table

• If we stopped all incremental activity for a quarter, what would our structure deliver on its own?
• Do our incentives, internal and partner, pay for the growth model we say we are running?
• Which of our channels are creating value, and which are redistributing it from each other?
• Who owns the cross-channel trade-offs, and when did that forum last change a decision?
• Is our operating model designed for how we make money now, or how we made money five years ago?
• Before we approve the next response to the slowdown, have we established whether the constraint is demand, proposition or architecture?

How Hartmann Advisory helps

Hartmann Advisory helps travel brands and travel insurers diagnose the structural causes of stalled growth, map where value is made and lost across channels and partners, and sequence the reset that lets effort convert into growth again.

Hartmann Advisory is a specialist, senior and founder-led advisory firm for travel brands and travel insurers across Australia, New Zealand and international markets. Every engagement is led by the founder from diagnosis to delivery, scoped against a measurable result and built to be delivered rather than filed.

We work across four practices.

• Commercial strategy and growth, clarifying where to play, how to win and what has to change to lift performance.
• Partnership and distribution performance, strengthening the economics, structures and governance behind partnerships.
• Market representation and expansion, leading entry and growth in new markets, including in-market representation of client brands.
• Transformation and operating model, aligning strategy, structure and accountability so that execution keeps pace with ambition.

Hartmann Advisory is led by Matt Endycott, who brings 25 years leading travel and insurance distribution as Head of Travel at Allianz Partners, Head of Distribution at nib Travel and Head of Partnerships at Europ Assistance, now Redion. Earlier roles include Virgin Australia and The Travel Corporation. His work spans airlines, retail groups, wholesalers, loyalty programs, insurers and financial institutions across Australia, New Zealand, North America, the UK and Europe.

In travel and travel insurance, the question is rarely whether teams are working hard enough, and far more often whether the architecture still deserves their effort.

Start a conversation

If growth has slowed or channel performance is under pressure and you need a clearer view of where value is being lost across distribution and partnerships, we would welcome a conversation.

Matt Endycott

Founder and Managing Director

matt@hartmannadvisory.com.au

+61 467 412 917

hartmannadvisory.com.au

Sources and notes

Illustrative examples in this analysis are composites drawn from patterns observed across the sector and do not describe any single business. This analysis represents the views of Hartmann Advisory and is provided for general information. It is not commercial, legal or financial advice.