Dynamic packaging ‘past its peak’

Growth in dynamic packaging by agents has passed its peak, according to the head of Advantage Travel Centres.

Decent commission payments on traditional packages and the risk of liability if something goes wrong on a dynamically packaged holiday have combined to reverse the trend, says Advantage chief executive John McEwan.

He said: “Packages are well-priced and paying reasonable commission. There is still a lot of dynamic packaging, but most of the business of general travel agents is in packages.

“Operators are specialists at putting packages together and all the risks are with [them].”

McEwan believes better-than-expected commissions have transformed a situation in which it seemed every agent was moving wholesale to packaging holidays online.

“When Thomson [now TUI Travel UK] took down commission three years ago we saw a potential downward spiral in commissions,” he said. “A lot of agents felt they had no choice but to dynamically package.

“We are not seeing the kind of growth predicted. There is a risk [attached to dynamic packaging] and agents prefer to sell packages at the right price rather than take a risk.”

Colin Heal, chairman of rival consortium Worldchoice, said: “There is evidence dynamic packaging is not growing as fast as previously.

“People are saying packages are back in favour and looking at the viability of airlines.

However, Travel Trust Association director Todd Carpenter said: “This is about economics. If an agent can make more money dynamically packaging, they will. If they can make money selling packages they will do that.”

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