Virgin Holidays is to become a purely direct-sell tour operator after 30 years of selling through the trade.
The long-haul specialist said it has made the decision because it can no longer add the value and the consistency of service it wants if it doesn’t “own the customer”.
Virgin Holidays managing director Mark Anderson confirmed that all existing bookings would be honoured and all its terms and conditions for any changes to bookings would remain in place for bookings already made by agents.
But he said there would be a cut-off point for any new bookings to be made, depending on different commercial contracts, that would average out at about 30 days’ time.
Anderson said trade sales had gradually been representing a smaller proportion of total sales as it has experienced consistent growth through its three direct booking channels of its call centre, it website and its retail shops – both concessions and high street stores.
“Agent sales represented about 10% of Virgin Holidays’ business last year and it’s less than 10% this year. But it used to be a lot higher than that of course, and we know that this news will affect a lot of agents,” he said.
Anderson confirmed that three people working in its trade sales team were currently under consultation but he hoped to be able to redeploy them to other parts of the business.
Asked if the move to sell purely direct to the consumer was in any way related to cost-cutting through not having to pay commissions, Anderson confirmed: “It’s genuinely all about customer retention for us. Where we’re going as a business, in terms of offering the very best service, not just in travel, but against other companies and other sectors, just wouldn’t be achievable without owning the customer data, through the booking and whole pre-departure experience.
“Virgin Holidays’ unique selling point is our brilliant customer service. We’ve got a very consistent experience but if, as a customer, you book through trade, you’re immediately at a disadvantage in terms of what you get from Virgin Holidays.
“As the business evolves, we’re not going to get to our ultimate customer vision in terms of being close to our customers, getting all of them to repeat book with us and give them a totally unique experience.”
Anderson added: “This is purely a Virgin Holidays decision and not in any way related to Virgin Atlantic. There will be no change at all with them and their relationship with agents.”
Virgin Holidays recently launched a new type of retail store that has been designed to inspire customers through immersive experiences.
The first two new stores, located at the Bluewater shopping centre in Kent and at the Metro Centre in Gateshead, have been designed to create a “landscape of interaction allowing customers to explore new destinations, discover new experiences and shop for holidays in a relaxing environment”.
Virgin Holidays also celebrated its 30th Birthday this month with the launch of a new range of premium holidays called ‘Wonderlist’, dedicated to customers who are looking for “fun and affordable luxury”.
Andy Freeth, managing director of rival operators Travel 2 and Gold Medal, tweeted: “I feel a surge of growth coming our way. I’ll start staffing up accordingly to meet the needs of the independent agent community. #tradeonly.”