A SIGNIFICANT tranche of Worldchoice agents are expected to
follow their head office’s decision to de-rack First Choice group
products in a bitter row over commissions.
The move, threatening to spark a similar stand-off to four years
ago, sees most First Choice products put on stop sale through its
15 Worldchoice Travel Limited branches.
All other Worldchoice members have been sent letters urging them
to consider First Choice’s commission proposals, which
include reducing base commission to 10% for its mainstream holidays
this winter and next summer.
Worldchoice’s current central deal with First Choice
offers commission of 12.5% to 16%, while the consortium’s
sales make up less than 3% of First Choice’s mix.
Deputy chairman Keith Wilson said de-racking products –
including Hayes and Jarvis and Sovereign despite the fact they are
maintaining commission – was necessary but regrettable.
Citalia is unaffected because of a contract running until
Christmas.
Sales of First Choice products through Worldchoice Travel
Limited are worth £1.5 million.
“The commission terms offered are unacceptable. The majority of
members would have commission reduced to 10%,” said Wilson.
While it is up to individual members to decide whether to
continue supporting First Choice, Wilson claimed 22 regional
delegates had already pledged to follow suit in their own
agencies.
If other members follow, he estimated £2 million of First
Choice sales could be affected.
But First Choice director of sales Martin Froggatt stressed only
Worldchoice shops which failed to support the operator were
affected and they could move up to the higher tier of 12.5% if they
booked 125 passengers, not including flight-only, over winter and
summer 2005.
“We get 70% of our business from 30% of members. By doing this
we can continue to support members that support us,” he added.
He claimed the 10 top-selling Worldchoice shops have already
vowed to keep supporting the operator.