The ‘big three’ tour operators show no sign of backing down on the issue of price parity despite a homeworker’s open letter attracting widespread trade support.
Lynne Cuthbertson, of The Big Surprise, part of the Merlin Travel Group, urged Tui, easyJet holidays and Jet2holidays to offer price parity with consumers so agents did not appear to be “ripping off” customers with higher prices or having to discount commission to achieve a sale.
The issue has been a bugbear for years among independents who claim the big operators could attract significantly more agent sales and loyalty if they aligned their online and trade prices.
But in response to the latest plea both Jet2holidays and easyJet Holidays said they had no plans to change prices or how they work with the trade.
A Jet2holidays spokesperson said: “Jet2holidays has operated a successful and transparent pricing policy, both direct and online, for well over 10 years, which is commercially viable for both ourselves and for independent travel agents.
“As well as this policy, agency partners also benefit from our Partners2Success approach, which sees us work with them to help them grow their businesses – and we know from feedback that this is working extremely well.”
EasyJet holidays said it valued the support of the 7,000-plus agents it works with and offered promotions and trade-only incentives during the year as well as training and face-to-face support.
An EasyJet holidays spokesperson said: “We’re always listening to feedback from our agents which has seen us create a clearer commission structure alongside creating the updates our partners want to see via updates to the trade portal, from new features such as building and exporting personalised quotes to tools and filters to easily navigate our website and find the perfect break.”
“We look forward to continuing to foster strong relationships with our trusted travel agent partners.”
In the letter, Cuthbertson, who has been in the industry less than two years, described messages of “we love agents and we’ll pay you 10%-13% commission” from operators as “just smoke and mirrors”.
She wrote: “Personally, I’m tired of it. Due to the lack of price parity, most of us agents make 2% to 6% at best, just so we don’t look like we’re ripping off our customers. Let’s not even mention the countless wasted hours searching across both your consumer and trade platforms.
“I would rather know upfront that my commission is 5%, and trust that the consumer price matches the trade price.”
She claimed operators would have to spend more on their call centres and customer service teams if agents didn’t sell many of their packages.
Cuthbertson told Travel Weekly that the issue of price parity has “frustrated” her since she began her travel career almost two years ago, moving from roles in admin and IT.
She explained that as a newcomer, she has no choice but to try to price-match and win over clients.
Tui, easyJet holidays and Jet2holidays account for 30-40% of her business, with 60% coming from long-haul and cruise bookings, “where there is mostly price parity”, she added.
“My biggest gripe is the wasting of time. There has to be a solution,” she said.
Some established agents backed her plea, saying the issue remained a serious problem for independent travel retailers.
Lee Harrison, co-owner and director of Malvern World Travel, said agents had to continually evaluate whether a sale was worth pursuing – and worth discounting commission for – if a client questioned the difference between the trade and online price.
He said: “I’m not sure the larger companies know how hard we work to get a sale for them. When you make a price suggestion to a client they are immediately looking it up on their phone and asking us to explain it.
“If you have got price parity it makes it so much easier to make the sale and upsell.
“Operators have to realise price parity could give them better sales from agents, clearer loyalty and the ability for agents to upsell their products.”
Harrison, who is against discounting the agent’s commission to achieve a sale, said Jet2holidays did not feature his agency on its independent agency finder search on its website. While the operator was “not a big percentage” of his sales, he maintained: “It’s enough sales each month that we should be on their travel agent finder.”
Bailey’s Travel managing director Chris Bailey said it was right to raise the issue once more, saying: “There is not enough discussion around dual pricing. The more this issue is highlighted, the better. Our Jet2holidays’ sales are not as high as they could be [due to the lack of price parity].”
But Bailey was against dropping commission to 5%, insisting remuneration needed to be higher for agents to profitably run their businesses.
“We have to make a minimum of say 10% commission because we are running a business and I want to pay staff above the industry average so I don’t want to be forced into a corner where I am making 5% and can’t do that,” he said.
He added it did not make sense for his agency to discount commission and make “£50 on a sale”.
“You have to do the booking admin, print out all the documentation, it doesn’t make sense; you become a ‘busy fool’ and don’t make enough margin,” he said.
He also feared large operators lacked the confidence to offer price parity. “They feel they will lose out in the race to the bottom with online rivals,” he said.