Industry braced for a nervous summer
Comment by Jeremy Skidmore (www.jeremyskidmore.com)
The claim that holidays are a necessity that people are simply not prepared to give up is set to be sorely tested this summer.
There’s no question that for many in the industry, the market is, at best, flat. Chessington-based Barwell Travel and Essex-based Mayflower Travel have already hung out the white flag and others will follow.
Now, everybody is sweating about the lates market.
We’ve been fed a diet of surveys that claim holidays are no longer a luxury and, after a decade or so of affluence, people will take them come what may. But now, many observers are not so sure.
Will rising fuel and food prices and a strong euro make some think twice about travelling? UK resorts are hoping they will be in for a boom time this summer as people opt to stay at home, but whether it’s really any cheaper by the UK seaside than the Mediterranean is questionable.
There will be a small percentage who holiday on their back lawn (weather permitting), but I don’t think the economic climate will stop the majority jetting off. However, despite capacity being taken out of the market, competition for customers will be intense and we’re bound to see some heavy discounts to entice people.
Meanwhile, the deal struck by TUI and Advantage is a reflection of the current economic climate. It would have been unthinkable a couple of years ago, after TUI slashed independents’ commission and boldly claimed they didn’t need them to sell their holidays.
But the plan didn’t quite work, many of the architects of the scheme have departed, and the new Thomson/First Choice organisation is taking a more pragmatic approach.
Not surprisingly, some agents are bitter about the way they were treated by TUI and are none too keen to start selling their products.
But I would say, ‘use the situation to your advantage’. If a customer wants a Thomson or First Choice holiday, or those operators are offering the most suitable package for your clients, you might as well make some decent cash out of it.
But I would also say ‘don’t ever put yourself in a situation again where one company can seriously damage your business.’ After the commission cutting, Triton was formed and the most important thing to come out of that grouping was not the ability to demand better commissions, but the development of in-house products.
The Triton products may not be suitable for all clients, but they gave independents real independence, because they were no longer at the mercy of a tour operator which could slash commissions whenever it felt like it.
It would be foolhardy to throw away that independence now.
Jeremy Skidmore
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