The Advantage Travel Partnership’s managing director has questioned the “commercial sense” in Virgin Holidays becoming a direct-sell only operator.
The tour operator announced this morning that it would be cutting out travel agents.
“I’m intrigued to understand how you can make ‘holidays come alive’ direct, as quoted by Mark Anderson in this morning’s trade media,” said Julia Lo Bue-Said.
The Virgin Holidays managing director said this morning that customers who book through the trade are “immediately at a disadvantage in terms of what you get from Virgin Holidays”, citing the brand’s customer service as its unique selling point.
Lo Bue-Said continued: “With 10% of its distribution about to be turned off, I wonder whether the Virgin Holidays executives have given any real thought about who will be the beneficiaries of this sales volume.
“To suggest this is not a reflection of the trade is an insult and at times like this you would like to see a little humanity and common sense from a business like Virgin Holidays.
“The reasons given to us are that Virgin Holidays want to control the end to end customer experience – does this mean the service agents deliver isn’t up to their expectations?
“What is that? It certainly doesn’t demonstrate that they believe it’s a good one or perhaps I am being too pessimistic.”
Lo Bue-Said said that over the past 10 years Virgin Holidays has followed a policy of “deliberately discounting their products to customers, offering a discount for booking direct, forcing agents to switch sell to other business partners”.
“No one can control a customer and no one owns a customer,” she said. “A customer has a choice and Virgin Holidays want to remove that from them.”
The long-haul specialist said this morning it had 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”.
“I believe this is now a great opportunity for agents to engage with and support those suppliers that truly value their business,” continued Lo Bue-Said.
“In such a competitive market place, grown up decisions need to be made as to which partners are worth backing.
“After all, an agent is acting on behalf of the principal but in order to do so successfully there are key business practices that need adopting: Price parity, sensible remuneration and agent partner support are just a few elements agents require in order to be
effective resellers.
“As a parallel, we recently saw Lufthansa impose a charge for all bookings made by the trade when not booking through their trade website, a stance which has already resulted in a detrimental impact on their sales through the trade.
“Virgin Holidays is giving its agent partners no choice, but for our agents we are providing them with a number of options on who will be the beneficiaries of the 10% of volume that Virgin Holidays does not value.”
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, its 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.