Miles Morgan Travel founder Miles Morgan evaluates the pros and cons of the three major operators
It all feels very strange to be talking about Tui courting more travel agents – as though we’re turning back the clock. I can’t help feeling like the poacher turned gamekeeper, having been at the Tui/Thomson end of the relationship when commissions were cut, but now at the agent end. Given this, I am certainly well qualified to discuss the subject!
So, with my current hat on, what should us agents be doing in response? Let’s start with the best news of all. At Travel Weekly’s Future of Travel Conference two weeks ago, the bosses of the big three happily sat next to each other and did agree on at least one thing: demand for holidays for 2024 should be strong, although price will come under some pressure due to mortgage rates and the cost-of-living hit at the family end of the market. Great news, on the whole, which is something we would probably all agree on.
But then they disagreed. Jet2’s Steve Heapy questioned Tui’s decision to start working more closely with agents, comparing the company to a “returning philanderer promising things will be different this time”.
Tui’s Andrew Flintham, however, stressed that his company is in it for the long term. So, what do we believe and who do we trust out of the big three?
Judge the rivals
Let’s start with easyJet holidays. They are the latest to enter the market and are certainly courting us agents strongly, as highlighted by the attendance at their ‘Big Orange Party’ a few weeks ago. For me, their product is not as good as the other two quite yet and their booking system is the weakest of the three, plus their online discounts don’t help your profit. But on the plus side, they are in growth mode and need agent support to achieve that growth.
Jet2 have positioned themselves well as the “agents’ mates”. They have a strong and proven track record of supporting the trade, but the lack of price parity is a big negative and the “rain cheques” they hand out to passengers on the flight home introduce a world of discounts to people. Margin with Jet2 can be a challenge too, but their marketing does drive customers to the door. Their booking system is also excellent, which is a big positive.
So, to Tui. Their discounts are all over the shop and sometimes even your commission doesn’t cover it (which is a crazy strategy on their own product, in my opinion). Their shops do compete with some agents – around 350 or so compared with nearly a thousand like it once was – but on my patch it’s now only a very few. On the positive side, they have great product which is tried and tested and loved by many customers, as well as a strong flying programme on a good in-house airline.
Forget the history
The debate therefore centres on whether Tui’s move is a knee-jerk reaction that will not last or a genuine long-term change in strategy. Firstly, I think it’s important to forget about the history. What happened is behind us and decisions made years ago have no bearing on the future.
I would simply look at their flying programme local to you, the demand for their type of product from your customers and add that insight to the amount of money you make from each passenger and booking after matching any of the big three’s discounts. That combination will tell you where your business should be going.
My results on this will be different, so I would advise doing it yourself and seeing what you find; take the emotion out and let the facts do the work. This applies to high street agents and homeworkers alike.
Finally, the positive news for us is that the clamour among the big three for agent business can only be good for us all, as history tells us it will drive up commission as they compete for our business. But can you imagine if one of the big three stopped online discounting? They would sweep up…