Retailers make it their business to sell leisure

Retailers make it their business to sell leisure

More business travel agents are getting into the leisure side of the industry. But will the move pay off? Diane Smith reports

THEADVICE may usually be “don’t mix business with pleasure” but business agents are flouting the rules and aiming to become a one-stop travel shop for their corporate clients.

In previous years, the small returns on leisure travel led business agents to pull out of selling holidays.

But the Internet, out-of-town call centres and ticketless travel have taken away the previous burden of huge overheads, making leisure travel a viable option for business agents. And the threat of zero commission has forced agents to look for additional ways to make money.

With business agents putting less demand on tour operators’ brochures and having an established and loyal database, suppliers are also keen to embrace this extra distribution channel.

Advantage director of business travel Norman Gage said: “About three years ago, business agents just couldn’t get the return per square foot on leisure. We used to run a leisure section for some of our members but it did not pay.

“Now people have started to have huge call centres outside of the city centres and they think, what can we fill it with? Leisure travel is ideal for this. It happened in the US. When commissions were cut there, agents looked for alternative revenue streams.”

Gage believes the trend could take a couple of years to develop adding:”We are not seeing a great move yet. I think 2002 will see a larger shift, as people become more Web savvy.”

But many business agents claim they are already having to launch into leisure to provide “added benefit” to their clients.

Rosenbluth International bought Internet business travel agency Biztravel.com last year, with plans to create a leisure arm for clients. The site will be pitched at smaller businesses booking holidays and it is expected to be launched in the next few months.

Amersham Travel may also increase its leisure offering after being bought by travel-store.com earlier this year, despite business travel currently accounting for 95% of trade. The business travel agency, which is due to rebrand as travelstore.com, has leisure staff that service business clients.

Amersham operations director Mandy Pennell said: “We’ve got leisure staff and keep them separate from the rest. It’s part of the relationship we have with customers that we have to offer a full service.”

Ayscough Travel chairman Don Lunn agreed it is likely that more business agents will have leisure staff in the future.”The whole thing has changed. Everything we do is specialist. Expert people are expected in all specialist areas,” he said.

He added that as more clients package their own holidays and book on-line, agents can still offer their expertise.

Lunn said: “We no longer have a high-street presence and the majority of people are starting to make their own holiday arrangements. But we have always been in the business to give advice.”

Advantage’s business division is working on an on-line booking system which will allow members’ corporate clients to book leisure trips with their business agent.

Gage added:”It’s a case of really working your customers to get a bigger return.”

Lunn: experts are needed in all areas now

Analysis

The pleasure principle: new technology has enabled traditional business agencies to move into the leisure market

Service fees set to provoke corporate shift

Business retailers are likely to win more leisure business from their corporate clients in the light of increasing commission cuts.

Currently, most business agents make money on leisure sales through commission and on business sales through charging clients a fee, refunding received commission to the company.

But a reduction in commission could see the system changing and the gap between business and leisure agents narrowing.

Ayscough Travel chairman Don Lunn said:”While operators pay commission, we don’t charge the corporate client. It’s normally a separate entity and a deal with the employee rather than the firm. But if commissions are reduced, it may be that holidays are sold in a different way and it may be cheaper going to a corporate agent than the high street.”

Uniglobe is ensuring that each new business franchise has its own leisure arm and although corporate trade accounts for 65% of its revenue, it is looking to make a 50/50 split with leisure (Travel Weekly September 11).

Managing director Michael Levy said:”We haven’t introduced fees yet on the leisure side but I applaud British Airways for its move to do away with commission.”