Lack of price parity mars the rapid rise of Jet2holidays and Jet2.com, says Miles Morgan, MD of Miles Morgan Travel
It has been fascinating to watch the rise of Jet2 from the sidelines down in the southwest.
With its programme this year from Birmingham we are now doing bookings and getting to understand the company.
The agent reaction has been very positive, but should we be so excited?
This begs the question, what does a good supplier look like to us agents? Agent-friendly is the term often used, but what does that mean? I guess the following would be on most people’s list:
• A decent level of commission
• A bit of marketing cash to drive some customers in
• No competitor shop next door
• A good product that customers like
• Price parity.
So how does Jet2 stack up?
From what I can understand it certainly ticks the top three boxes and so gets off to a good start.
On the product side, it appears to be the ‘old Airtours revisited’, with families at the heart of what it offers and prices that attract that market very nicely.
I say the old Airtours, as that operator changed hugely as it grew, but that was certainly where it started. Jet2 even started with a northern powerhouse base.
We then hit the more thorny issue of price parity, where Jet2 certainly hits the skids.
It’s almost proud to say it doesn’t offer parity as agents seem quite happy with its 6% direct discounting.
I have to say I find this odd. If it launched with full price parity and 6% commission, would people be as excited? I think not.
So what is different? Well, of course agents don’t have to match its online price, and some clients won’t ask.
But once customers have been on a Jet2 holiday, I imagine that when you next give them a Jet2 quote they will look at its website to compare – and that could be a problem.
Future strategy
What next for Jet2? Well firstly, it seems to be a very well-run company, growing at pace, and it no doubt has a game plan. But what does that look like?
Will it open shops? That’s always a possibility, but with retail supporters giving the company no risk on the high street, why do it?
Will it go direct? This is maybe the bigger threat for the trade.
Jet2 needs all the support of independent agents now to grow at the pace it is expanding, but once it has established itself, will it still need us?
The family market is a price-conscious one and Jet2 might feel it could use the saving on agents’ commission to drive its prices lower.
I’m rather on the outside looking at this; maybe agents up north are closer to Jet2 and know its plans.
Looking at it from down south, the agent support and euphoria seems a bit strange, given that Thomas Cook would appear to offer more on the commission front.
But Jet2 has clearly done an excellent job of driving demand, and with Cook and Tui not selling the operator, agents have rightly spotted an opportunity, certainly in the short term.
As always, our industry is ever- changing and the arrival of new kids on the block keeps the excitement up.
What I would say to Jet2 is ‘Congratulations: your growth has been tremendous and has certainly made waves with the big legacy players’.