Thomson’s big squeeze hits agents

INDEPENDENT agents have threatened to snub operators that follow Thomson and slash commission to 7%, in a row that threatens to tear the trade apart.

Thomson will cut base commission to 7% from January 1, with a top tier of 10%, in a move unveiled at the ABTA Travel Convention.

It has already struck a deal with Thomas Cook and is in talks with other retail chains and consortia.

Agents say 7% commission will mean selling at a loss, since a 10% rate yields an average profit of only 1.3%.

Midconsort chief executive Charles Eftichiou urged members to de-rack operators that squeeze commission, and Global Travel Group founder George Begg warned: “This is going to hurt Thomson.”

But Thomas Cook chief executive Manny Fontenla-Novoa said his company will follow suit to stay competitive.

Co-operative Travel Trading Group chief operating officer Mike Greenacre told Thomas Cook to “think carefully”, warning rash decisions will “trash relations you have worked hard to develop”.

Fontenla-Novoa responded by threatening to withhold peak summer stock from agents who switch away from Thomas Cook to sell their own, dynamically packaged deals.

Advantage managing director John McEwan described the threat as “posturing”.

Thomson retail and commercial director Derek Jones said he was prepared for agents to snub the operator. “If we have to go it alone, we will,” he said.

First Choice and MyTravel admit much will hinge on Thomson’s prices in this month’s brochures.