Excessive discounting in the cruise market by agents could lead to a cut in commission levels, says a leading consortium boss.
The Advantage chief executive and Triton Travel Group chairman John McEwan said he thinks many agents are currently resorting to heavy discounting as a means of closing the deal in the increasingly competitive market.
However, he believes this could lead to cruiselines questioning the levels of commission they are currently paying if agents persist in sacrificing much of their commission to make a sale.
He added: “We’re not going to prevent discounting but the really good travel agents are finding a way of building a business without giving the shop away.
“If retailers in cruise continue to discount at the (current) levels, then if I was a cruiseline I would be questioning the level of commission I’m paying out.”
Advantage member Air Viceroy managing director Steve Moore agreed agents should avoid the temptation to give large discounts simply to make a sale.
He added: “We don’t discount, we only price match where we can. I’m not of the opinion that something is better than nothing.”
McEwan also warned that the recent increases in the cost of oil combined with the strong Euro means could combines to see price increases of up to £50 on a £500 holiday.
He said: “I think the luxury market will take it (the prices rises) in its stride but I do think it is a problem for the mainstream.”
McEwan also said that problems predicted for the consumer concerning rising mortgages are yet to strike, adding: “A lot of the mortgage problems will happen in the latter part of the year, people on fixed rate mortgages are going to find a significant hike in their mortgages.”