| Journal: TWUK | Section: |
| Title: | Issue Date: 15/05/00 |
| Author: | Page Number: 8 |
| Copyright: Other |
Analysis
The front line: independent agents are having to work harder to win bookingsWill the direct hit go a brochure too far?
Agents are weighing-up deracking against long-term growth with the majors. Steve Jones reports
OPERATORS have long since incurred the wrath of agents over their policy of using brochures to advertise direct distribution channels.But by slapping stickers over the offending direct telephone numbers – which usually appear on the back cover of brochures – most agents have overcome the problem, or at least become accustomed to it.
However, the launch of Thomson and Airtours’ summer 2001 programmes has reignited the debate as direct booking information is on almost every other page.
Although both companies have vigorously defended the policy, no amount of explanations or assurances have placated agents who also feel operators have shot themselves in the foot by pursuing direct business so aggressively.
Scottish Passenger Agents’ Retail Consortium chief executive Ken McLeod said: “Thomson and Airtours have built up relationships with agents and now they have knocked it on the head.
“We have an agreement with Thomson and our business with it has gone well since we became a Preferred Agent. There was a solid foundation but now Thomson has moved the goalposts. It seems to have forgotten that its business over the years has been built through agents.”
Thomson sales director Manuel Mascarenhas warned that he would reconsider Preferred Agent agreements with those who derack the operator’s 2001 brochures – a diplomatic way of saying terminate them.
And here lies a crucial dilemma for agents. Can they afford to derack the likes of Thomson and Airtours?
“About a third of our 73 branches have deracked 2001 brochures and as sales are low, it’s not a big deal,” said McLeod. “But long term, can we afford not to rack them?
“All the consortiums need to unite in condemning operators for the direct push if we are to have a chance of forcing a change.”
Advantage Travel Centres, which recently abandoned its franchise with Airtours but has retained close ties, is also in a quandary.
President Roger Smith said: “It’s difficult to stop what they are doing. But UKLG representatives will be at our conference which starts later this week and they are going to get so much stick from our members.
“Operators have had the direct telephone number in the brochure for a while but it’s now getting out of hand. It’s a serious problem.”
Smith said the direct drive stems from the directional-selling policies adopted by both the major players.
“Both Thomson and Airtours need to protect their distribution,” said Smith. “Going Places does not sell Thomson anymore and Lunn Poly does not sell Airtours. So they need to maximise their other distribution channels and direct sales is one means of doing it. But this will hit our sales of the mass-market operators.
“Six months ago we thought Thomson had seen the error of its ways – which Airtours had recognised – and wished to work with independent agents. Now we are not so sure.”
Airtours sales, marketing and development director Ed Sims denied there was a deliberate shift in its relationship with agents in light of emerging e-commerce distribution channels.
He stressed independent agents would remain a pivotal form of distribution for years to come.
“We have invested massively in the retail sector,” said Sims. “Business through the independent sector is showing greater year-on-year increases than Going Places or direct. I cannot imagine a situation, for a company of our size and risk, where agents are not a vital distribution channel.
“We don’t want one channel to be to the detriment of the other,” added Sims. “I want two parallel growth curves – when the lines cross and one starts taking business from the other we will look at the policy.”
Thomson sales director Manuel Mascarenhas said while more direct booking information has been included in the 2001 brochures, references to Preferred Agents also appear on virtually every page.
“We have no desire to alienate Preferred Agents. We want to work very closely with them and drive business through agents who support us,” he said.
Smith: the situation is getting out of hand
quotes
“I have invested in the strength and seniority of our sales force. We are always present at retail events, have more educational places than ever and are paying more in commission. I can’t see a time when agents aren’t a crucial distribution channel.”
Ed Sims, sales, marketing and development director, Airtours
“People lose sight of the fact we need to spread risk across our main distribution channels – direct and through agents.”
Manuel Mascarenhas, sales director, Thomson
“We have an agreement under the Preferred Agents scheme to rack Thomson brochures but it is not us moving the goalposts.”
Ken McLeod, chief executive, SPARC
“I am thinking of using a guillotine to cut out all these direct numbers.”
Roger Smith, president, Advantage