Discounts ‘not worth matching’

AGENTS are turning down some holiday bookings because they cannot match aggressive prices of rival retailers without losing money.

Package holiday sales are almost flat following a pick-up in the second week of January.

Industry statistics show the market was 0.3% down in the week to January 11. This weekend, January 17-18, and next weekend, are crucial for sales.

Unofficial figures suggest Airtours Holidays is 14% down, JMC 5% up, Thomson Holidays 1%-2% down and First Choice Holidays level.

Retail discounts have hit the highest levels in years as agents compete on the high street.

Lunn Poly managers have already been accused of offering discounts up to 16% instead of 6%, causing discounts to “spiral out of control”.

While most agents are price matching – as they are played off against each other by consumers – some say the aggressive discounts are not worth matching.

Ilkeston Co-op Travel managing director Chris Smith said shops were turning away some sales because they would lose money by dropping prices lower.

“We’ve taken a lot of pain because of the high discount levels. We’d normally give away 6% but this year we’re touching 8% to compete.

“Customers are playing the game and you get examples where we will make a loss – so we have to pull out.”

Thomas Cook director of trade relations Ian Derbyshire said shops would refuse certain loss-making bookings.

“We’re trying to match prices but where it is financially sensitive you let someone else take the booking.”

Lunn Poly claims it has been “unfairly singled out”.

TUI UK commercial director Derek Jones said: “There are a lot of competitive discounts being used in the market to close sales.”

The Co-operative Travel Trading Group has been particularly aggressive is offering £100 and £50-off deals on 16 operators at the weekend to stimulate sales. Cosmos, Sovereign, Hayes and Jarvis and Libra Holidays are offering £100 off.

CTTG commercial manager Mike Beaumont conceded they were “very big savings” but was “very happy financially” with the results.

Beaumont said CTTG was seeing double-digit growth compared with a market in single figure growth.