The lates period has not yet proved to be the cut-price bloodbath that many had predicted earlier in the year, partly due to the fact that, with the capacity cuts of late last year, operators are not dumping lots of stock at a discount.
But with year-on-year sales down, one thing is for sure: most agents are pinning their hopes on a flurry of late bookings for July and August.
In terms of where this leaves dynamic packaging, one key area for agents is that seat capacity is not proving a problem.
Monster Travel managing director David Hawke said: “The capacity that was taken out by the big two and XL has been picked up by the low-cost carriers and Kiss, and the traditional players are still selling a lot of charter flight-only at reasonable prices.”
Earlier in the year, there was a definite trend back towards package holidays over dynamic packaging because of the protection issue. This still seems to be the case for many, although those that have taken a ‘belt and braces’ approach to protection, by offering supplier failure insurance as well as holding a bond, say they have little trouble selling the concept to consumers.
The coming weeks will prove a crunch time for consumers who have not yet committed to a holiday, and travel suppliers with peak-season holidays left to sell.
Youtravel sales and marketing director Paul Riches said demand was still strong for travel over the next few weeks, which had enabled operators to hold up their prices, but the situation after that remained unclear.
“High season is still sluggish,” he said. “There will be pent-up demand for this, but the big question at the moment is at what point will people commit to buying a high season holiday – especially within the eurozone – and how much will they be prepared to spend?”
Case study: Miniple branch
Toni Tunstall, branch manager, Hays Travel, Darlington
What destinations are selling well? Turkey, as usual.
How do you dynamically package? We have just got our new iSell system, which makes it so much easier to dynamically package. It brings up options in price order, provides a comparison with a traditional package, and automatically updates results as you filter down. We used to go into each system individually, but now it’s just as quick as doing a package holiday, and so much more flexible for the customer.
How much of your business is dynamic packaging? We are doing about 38% dynamic packaging at the moment.
Is it easier or harder to sell? It’s about the way we sell it. We have supplier failure insurance and flights are ATOL protected, so they are quite happy with it. It’s down to staff confidence and how they sell it. We have drummed it in that it is the same as selling a package.
Is it financially worthwhile? Definitely. You have got better margins and often, if a customer has had a price from a tour operator’s website, you can dynamically package it, and it comes in cheaper without having to discount it, so your margins are protected.
Tony’s: Always compare a dynamic package with a traditional package. That’s the golden rule for every enquiry. It’s peace of mind for you, and you know you’re getting the best for the customer.
Case study: Online and call-centre business
David Hawke, managing director, Monster Travel
What destinations are selling well? Turkey, Greece and the Caribbean has had a resurgence, then it’s the Balearics and the Canaries.
How do you dynamically package? We use Traveltek’s Fusion platform for the website and call centre. It’s quite slick in terms of live availability and every bed bank you could want is integrated, as well as flights, transfers and car hire – it’s very easy to use.
How much of your business is dynamic packaging? It fluctuates between 40% and 60%. At the moment it’s in favour of dynamic packaging.
Is it easier or harder to sell? We’re part of the Freedom Travel Group, so we ATOL bond everything. From a customer’s point of view, it is the same level of protection, and for certain destinations, that is essential. There is also more administration involved – there are three or four suppliers per booking.
Is it financially worthwhile? We are probably making a slightly higher margin from traditional packages at the moment, but that is because of the competitiveness of players such as Travel Republic and On the Beach. A lot of people saw dynamic packaging as a means of making more margin, but that has flipped on its head because the technology has caught up, but it’s a temporary situation and when the bonding situation gets sorted out, the margins will go up.
David’s tip: The temptation with the technology is to let yourself be driven towards the cheapest price, so always try and upsell and cross-sell and think of the best option, as well as selling the benefits of financial protection. Be prepared to sell yourself.
Case study: Homeworker
Dean Wilson, Travel Counsellors
What destinations are selling well? The Red Sea and places outside the eurozone such as Turkey, and the Mediterranean coast.
How do you dynamically package? We use our own system, Phenix. There are lots of suppliers behind the system, including most of the big guys. One of the strengths of having an in-house system is that if you notice something is missing you can contact head office and they’ll find a supplier to fill the gap.
How much of your business is dynamic packaging? I’m doing about 38% in Phenix and that has increased over the past few years. I started about three years ago and it has doubled every year.
Is it harder or easier to sell? Most of the time I can do a dynamic package cheaper and there is no concern from customers – most people pay on a credit card. I could count on one hand the number of people who have said they don’t want to do it that way. It does take longer, but only because there is so much choice.
Is it financially worthwhile? It makes more than a standard package, and I’m still able to deliver a cheaper price to the consumer, so it is a win-win situation.
Dean’s tip: Sell the extras. I seem to have access to far more room types than I do with conventional packages, and there is an opportunity to upsell room types, and often for not a great deal more.