“Ihate to think what is going to happen if we really do hit a recession”
I once read when it came to air combat the average life expectancy of a rear gunner in a World War II bomber was a mere 20mins.
Looking at the travel industry as it prepares for the battle of 1999, Ihave to admit reluctantly it is independent agents who now occupy the equivalent of this ‘dead man’s seat’.
If 1998 was a dogfight, I hate to think what is going to happen if we really do hit a recession – and let’s face it, November and December sales didn’t do wonders for the industry’s confidence levels.
Independents are fighting a war they cannot hope to win unless they change their strategy.
The sales and takeovers of the past months have signalled the end of the travel industry as we have known it for the past 30 years.
What was merely power in the past has become an effective stranglehold – 70% of retail sales will be made through the top four multiples, with 80% of their bookings going to the largest four tour operators.
That has resulted in the multiples demanding much higher commission levels from the lesser tour operators who can still hope for racking space.
Inevitably, these commission rates will be better than those paid to most independents, who simply cannot offer the same bulk rates in return.
I believe 95% of independent agents face a very uncertain future and this undoubtedly has a knock-on effect when it comes to medium-sized tour operators.
They either put all their eggs in the multiples’ basket or increase their efforts to get direct bookings and, in doing so, risk alienating the multiples.
Independents that specialise in one aspect of the industry stand a chance of survival but many will go to the wall.
I’m hard pressed to come up with any advantages for the consumer – although the Big Four will be happy.
The multiples’ demand for increased commission will inevitably mean prices have to go up.
And while Ihave long felt the travel industry has sold itself too cheap, Ihad hoped tour operators and agents would benefit from any increases – not just the multiples.
Faced with the current economic situation, I can actually think of better years to hit the public with a range of more expensive holidays.
So we’ll probably have more tour operators and agents being bought or going under. That reduces choice, which is never a good thing.
Oh, and one final thought before we all go out and shoot ourselves – have a happy New Year.