| Journal: TWUK | Section: |
| Title: | Issue Date: 29/05/00 |
| Author: | Page Number: 13 |
| Copyright: Other |
It’s no good trying to churn out the cheapest possible deal for the public when the end result is that you’ve sold yourself out of business
Noel Josephides
Earlier this week, we hosted a travel agents’ regional meeting. John Grew from our office pointed out the very competitive special offers we were having to churn out in May and June to Greece because of overcapacity on the market.We resent having to discount our holidays to Greece but unfortunately we have no choice.
It is very rare we go below £200 for one week to committed self-catering accommodation. A £200 price, less commission, just about covers the cost of the seat and the transfers and the accommodation is load factored which doesn’t make it too painful.
John Grew thought £200 was a cheap deal but some of the agents disagreed, saying we were expensive and they could get one week to Greece for £50 less. Well, I know the market pretty well, better than most agents, and can tell you there is a lot of late stuff to Greece and Cyprus at £100 less. So, those agents selling at £150 aren’t finding the cheapest for their clients by far.
However, what agent in his right mind would actually want to sell packages at £100 or £150 when they could easily sell up to a more realistic price? The lunacy of agents who spend hours on slow viewdata systems looking for cheaper and cheaper deals and are proud of the fact makes me wonder what business acumen they have. To put it bluntly, they deserve to go out of business with that approach.
My message to them is that they’re mugs! That’s just as short sighted as the operators who sell at these prices so they can say they’ve increased their carryings. Anyone can sell at a loss.
The trick is to sell and make money – but this simple fact has historically always eluded many in the travel industry. For example, when independent travel agents sell the distressed stock of the vertically integrated companies, who traditionally don’t do them any favours, they are helping them make a marginal return on flying their aircraft. That has to take the biscuit for stupidity.
I am astounded every time I open a trade paper and read of agents criticising the direct-sell policies of the majors. Well then, it’s quite clear, don’t sell their holidays. Don’t just grin and bear it. As I said two weeks ago, there are plenty of alternatives.
Selling the packages of the market leaders and, at the same time, selling overseas holidays at £100 to £150 is guaranteed to put you out of business. I remember when we were making representations as Association of Independent Tour Operators to the Monopolies and Mergers Commission during the review of the industry, we suggested breaking away the retail chains from the tour-operating side of the vertically integrated companies. The logic behind this was to stop directional selling, restore transparency and that logic would dictate no independent retail chain would actively sell thousands of holidays at £100 and £150 when it did not have an airline-owning operator to support. How wrong we were.
The vertically integrated companies have obviously no problem in getting independents to sell their next to nothing offers. The public can afford to pay a lot more for its holidays. However, it doesn’t have to if we insist on selling cheap allocated-on-arrival packages.
“The trick is to sell and make money but thissimple fact has always eluded many in theindustry”