Travel Counsellors to ditch major operator

Travel Counsellors has announced it is preparing to ditch one of the big four as the amount of money it makes from the major operators continues to dwindle.

The Bolton-based homeworking agency is reviewing its commercial terms with suppliers following the introduction of its Phenix dynamic packaging system last year and says it is prepared to drop a major operator where it makes most commercial sense to do so.

The news follows Thomson’s announcement of further commission cuts as reported in Travel Weekly (April 21), and comes on the eve of the first Triton conference, where delegates will be told there is no future for independents not aligned to a strong consortium.

Travel Counsellors chairman David Speakman predicted problems for agents who rely on the big four after this summer. “Some 70% of agents only make up to 1% profit margin. There will be a culling of the travel agency fraternity over the next year,” he said.

Managing director Steve Byrne said the amount Travel Counsellors makes in commission from two of the big four has fallen 28% in three years.

And he said the proportion of business with Thomson, Thomas Cook, First Choice and Airtours has steadily fallen over the same period and now stands at 12.4%, 60% of which is flight only. “Our travel counsellors are saying we no longer want to sell these people as we did before,” he said. “We have to review our strategy with the big four in the context of a wider review of the number of suppliers we have.”

TUI UK sales and marketing director Miles Morgan said: “No relationship is ever permanent but I would be amazed if Travel Counsellors dropped one of the big four.”

Industry observers suggested Travel Counsellors’ move was a negotiating tactic.

Midconsort Elite chief executive Charles Eftichiou said, with reports Thomson has only had 10% of its product to sell through third parties this quarter, it could be considered that some of the big four are ditching the trade.

But Triton board director and Advantage managing director John McEwan said: “Agents have reduced their reliance on the big four. It’s difficult to make commitments to all four and be capable of delivering to all of them. This is a time when independent agents have to be part of a strong consortium.”

Meanwhile Thomson has admitted its latest round of commission cuts are a further blow to agents.

In a frankly-worded statement issued this week, Thomson cast no illusions over its future strategy with the trade. Confirming it was terminating contracts and reducing payments from 10% to 7% to some agents the statement began: “Thomson has dealt independent travel agents a further blow by announcing more cuts to commission.”

Chief executive Peter Rothwell said the company is not prepared to pay agents high commission fees and wants to channel sales directly through its own shops, website and call centres.

Meanwhile, Thomas Cook chief executive Manny Fontenla-Novoa warned: “Independents are suffering badly, they’ll have to choose partners for the long term or die. High-street footfall is down by 7%. Some 70% of people still book through an agent but there are too many travel agents on the high street.”