Tui Travel has confirmed independent agents should have an option to retain commission when the company moves to single pricing and introduces service fees in Thomson shops.
Distribution and online director Nick Longman revealed plans to move to a “core price” at Abta’s Travel Convention, without spelling out what it meant for third-party agents.
But this week Longman said independent agents should be able to retain commission at a lower rate or move to fees themselves.
He told Travel Weekly: “Our intention is to move to single, transparent pricing with proper multi-channel retailing.
“We have no intention of going 100% direct for the foreseeable future [so] we’ll need to work out with partners what single pricing means.
“A third-party agent could add a fee or we could retain commission at a lower rate. There will be no discount [online] so agents won’t have to discount commission. The retailer would retain the whole amount.”
He said: “There is about a 4% spread between online and retail prices.”
The move is likely in late 2014, with Longman (pictured, with Thomson staff) not expecting discussions with third-party agents “before early summer 2014.”
He described efforts at multi-channel selling as “clunky” up to now, but said the Phoenix IT system, now being installed across Tui Travel, would change that.
“The challenge is the 3%-4% gap [in pricing],” he said.
“There will be a significant loss of revenue [in shops]. This is still up for debate internally, but my view is if an agent offers a good service customers should be prepared to pay.
“We’ve done a number of trials trying various charges – £5, £10, £20 a head. We were upfront with people and there was a pretty good acceptance rate.
“It’s likely we’ll have a bigger trial in four or five regions in the next year to see what it does to sales.”
Longman said fees of £10-£20 a head are likely, “probably capped at £60-£70 a booking”.