Sleeping with the enemy?

THOMSON Holidays is using its core package holiday brand to make its first serious inroad into the accommodation-only sector – but agents can’t book it for several months.

The operator has pledged to sell the bed bank – which has offers of £1 per room per night – through the trade within six months once the technology is in place. But initially the 1,500 hotels and apartments in 48 beach destinations and 475 city hotels are only available on Thomson’s consumer website.

Rivals Thomas Cook and First Choice launched accommodation-only sites through agents this year and Airtours Holidays will launch a product by the new year.

TUI UK sales and marketing director Miles Morgan said the launch was an opportunity to serve a new market of customers.

“The number of packages sold is fairly static but if we’re to get into significant growth this is one of the opportunities. We’re attacking the low-cost sector with Thomsonfly and the bed bank sector with this,” he said.

He denied the move would hit core packages with Thomson likely to continue selling four million packages annually.

“There will be minimal cannibalisation – it’ll be incremental business not substitutional.”

The launch follows TUI UK’s decision to seek more business direct and become a dynamic packaging player.

Retailers reacted with surprise that the product was unavailable to the trade. Worldchoice chairman Colin Heal said: “The biggest impact could be on their own Lunn Poly agents as they sell a high proportion of Thomson product. It certainly doesn’t help agents generally.”

But Malvern-based Select World Travel director Lee Harrison questioned whether agents would use the site, given the number of accommodation-only providers in the market. He claimed the site would shift unsold package stock. “If Thomson went back to basics and priced sensibly it wouldn’t have this problem.”

Kent-based Miles Travel managing director Richard Loosley agreed the £1 lead-in price could be because TUI owned hotel stock it couldn’t shift.

Meanwhile, an Apartmentsabroad.com spokesman said Thomson would add credibility to the sector but added: “Last week Lunn Poly got out of discounting on the high street and now we’ve another TUI brand with a message of £1 per night.”

Lastminute.com UK MD John Kent, responsible for Medhotels, said. “The problem Thomson will have is its focus on committed beds. Consumers don’t always want the same package product.”

MyTravel deputy MD Steve Barrass said the move would allow Thomson to compete with Expedia.

Thomson’s accommodation is ABTA-bonded with “strict health and safety checks”. Reps will not be offered but there is a 24-hour telephone line for queries, car hire and excursion bookings, and emergencies.

Meanwhile, TUI’s Irish tour operator brand Budget Travel is to slash agent commission from 10% to 5% from January 1.

Irish Travel Agents’ Association president Michael Doorley said many of its 340 members had threatened to de-rack the brand following the announcement earlier this week.

He warned it could be bad news for the UK. “If it can get away with paying 5% in Ireland then it’s possible it can do the same in the UK.”