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Gill’s to tap new revenue streams after cutting costs

Gill’s Cruise Centre will look to increase its dynamic packaging business after announcing it is to relocate some sales support roles from its London base back to Wales to cut costs.


The Cardiff-based retailer, one of the UK’s biggest cruise travel agents, said it regretted the decision to relocate the 30 positions, but that it had to react to “current economic conditions”.


Although originally appearing to blame the recent decision by P&O Cruises’ trade arm Complete Cruise Solution to cut base commission to 5% for its 2012 launch onwards, Gill’s since downplayed this in an updated statement.


Gill’s chairman Alistair Gill told Travel Weekly that the retailer would continue to support P&O Cruises, as well as its sister brands Cunard and Princess Cruises, building on a relationship which dates back 45 years.


But he did admit current trading was a challenge although he said he understood the rationale behind the change in commission from CCS and that it would help Gill’s to stop giving revenue away to customers to compete with rival agents. 


“Our margins are good and we hated giving money away. There was a confused price message and that had to be sorted out.


“There were different prices people were paying for their cruise and there wasn’t a level playing field. At least now we know exactly where we are,” Gill said.


Under the new CCS commission structure, which has also seen large volume-based overrides scrapped, Gill said the retailer will look to increased automation, knowledgeable staff and dynamic packaging to boost revenues.


“Gill’s has huge brand awareness and it’s important to develop that branding. There are some exciting opportunities out there,” he added.


Observers said the move to cut costs by Gill’s following the commission cut appeared to support CCS claims that its new trade terms were a genuine attempt to ensure there was reduced scope to discount by travel agents competing against each other.


There had been claims that, despite assurances to the contrary, CCS would continue to support large producing agents with additional volume-based payments, but that was denied by the operator.


Last week P&O Cruises and Cunard revealed an additional 10% early booking discounts for its 2012/13 programme launches, effectively financed by the reduction in the commission it will pay to agents.


Gill said he agreed with Carnival UK chief executive David Dingle that moving to a 5% flat rate base commission would probably be commercially neutral for the operator due to the saving being used to reduce prices.


In a statement about the relocation of jobs, Gill said:  “In 2008 Gill’s Cruise Centre relocated its sales team from Cardiff to London, and this proved to be very successful for the business.


“As a consequence of this the company wanted to build on this success and located client services and documentation alongside sales in London for much improved communication and ultimately increased client satisfaction and repeat business.


“Business performance is likely to be affected by the current economic climate, therefore there are implications for the business if appropriate reductions to both fixed and variable costs are not implemented.


“It is therefore with regret that we have made the decision to relocate client service and documentation teams from the London office back to Cardiff.


“The immediate implication of this is that 30 positions have been displaced. Our staff are much valued as members of the Gill’s team, therefore all displaced staff have been offered alternative opportunities, either in our sales division which will remain in London, or relocation packages have been put in place offering staff positions within our Cardiff-based client services and documentation teams.


“We are pleased to say that at this stage there seems to be interest in our alternative offers, with a view to keeping redundancies to a minimum.”


 

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