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Agents locked in talks with Thomas Cook after price parity scrapped

By Amie Keeley and Juliet Dennis

Independent agents were in talks with Thomas Cook this week following the group’s decision to scrap price parity going in to the peak sales period.

The operator removed price parity for independent agents as well as for its own stores on December 21 following a trial in October in which it advertised some hotels cheaper online.

Thomas Cook said it had listened to feedback before making the decision but had to compete on a “level playing-field” with rivals.

Neither Jet2holidays nor Tui offer agents price parity.

Some independent agents, which make up 15% of Thomas Cook sales, reacted angrily to the move.

This week, consortia including The Travel Network Group were in talks with Thomas Cook, while other independents expected the policy to be “tweaked”.

Simon Morgan, owner of Welsh miniple Tailor Made Travel, said: “Thomas Cook had to do it but I believe we’ll see a commercial turnaround when it sees the cost of it.

“We turn over £6 million to £7 million of Thomas Cook holidays a year and I’ve already seen a dramatic change in sales. Hopefully, it will tweak its policy and bring in minimum commission levels on price-match deals.”

Spear Travels managing director Peter Cookson said Thomas Cook had “shot itself in the foot” and predicted it would return to court the trade.

“Doubtless, Thomas Cook will come back with the begging bowl later,” he said. “It is still in our top 10, figures-wise, but this plays straight into the hands of Jet2holidays, which must have thought this was an early Christmas present.”

Alistair Rowland, group general manager for Midcounties Co-operative Travel, agreed the move was a “gift” to Thomas Cook’s competitors.

“If it doesn’t get the volume grab online, it’s going to find it difficult to get immediate traction from the trade,” he said. “I can see why Thomas Cook has done it, but it’s a risky strategy if there is no plan B.

“It’s a huge disappointment. All the good work Thomas Cook has done with the trade is at risk.”

Baileys Travel managing director Chris Bailey said his shops would continue to sell Thomas Cook, but he believed the move could backfire and lead to closures of its own stores.

He said: “It makes no sense to introduce a pricing regime that works against independent agents and its own shops.”

Phil Gardner, Thomas Cook’s sales and e-commerce director, said: “We need to compete on a level playing-field with other operators and online agents.

“As a result, we will be strengthening our web pricing to make sure we offer our online customers the best price possible.”

Thomas Cook introduced price parity for third-party agents in 2013.

At a glance: Thomas Cook pricing strategy

• Thomas Cook scrapped price parity on December 21, following a trial. It said it needed to “compete on a level playing-field with rivals”.

• Major consortia were in discussions this week with Cook, following the decision.

• Neither Jet2holidays nor Tui offer price parity.

• Many agents have reacted angrily to the move, saying it will “play into the hands” of Cook’s competitors. Independent agents account for 15% of Cook sales.

• Some expect the policy to be “tweaked” to appease the trade. They claim it could backfire and lead to closures of the giant’s own shops.

• Cook brought in price parity in 2013.

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