Firstly let me say I am not a member of Advantage. It just does not seem to fit my overall philosophy.
The subject of consortia and alliances is pretty emotional at the moment and no doubt my comments will upset some who are intent on trying to copy the multiples. But my argument is simple.
If you are a multiple with a dedicated chain of shops you are told what to sell, then if it does not suit some of the shops, they still go along with the scheme for the good of the whole. In a chain of independents, each firm is its own profit centre.
If it is not commercially viable for certain profit centres to sell a product, those shops need to seek an alternative. Also if a multiple loses money in retailing, it can be offset against profit made by its own tour operation and airline.
It only matters if the operator returns a fat profit.
If the big three or four multiples set their mind to promoting (plus their own product) another operator, they will be able to put pressure on their shops to (mostly) sell it. This gives them large cash incentives. More than can be produced by an alliance.
So if alliances cannot match the incentives gained by the big three – why compete with them to, at best, come fourth?
The big operators put a direct-sell telephone number (or Web address) in the brochures we distribute for them. This saves enormous marketing expense.
If they now discount and give away, say half of the agents’ commission, they are earning more than they would if the retailer sold the holiday for them!
The agent now cuts the price of the holiday to match the operators’ selling cost and, if they do not go out of business, they struggle on the reduced margins.
I do not know of any other trade where the retailer is competing with his own wholesaler in such a way. Why do we put up with it?
Why don’t consortia work only with operators who value them and support them.
Advantage – I admire you for your stance in this matter – as long you are committed to this ideology I would like to see other alliances supporting you. Operators should decide if they wish to sell in a direct manner or would prefer to work through agents.
Name and address withheld