Thomson cuts commissions
Thomson has scrapped commissions to agents on accommodation and seat-only sales.
The operator says it has cut commissions from 10% to zero in a bid to stay competitive in the dynamic packaging sector. This was the reason given in a letter that was issued to agents this week revising the existing agency agreements.
Commission on seat-only sales is also being axed for agents with no commercial agreement with the company.
The move is part of parent company TUI UK’s cost cutting drive, which includes relocation of its head office from London to Luton and the loss of 800 jobs.
According to TUI UK, the integration of specialist brands like Specialist Holidays Group and Magic Travel has caused the company to re-evaluate the way it does business.
In a statement the travel group said: “We believe the new agreement more accurately reflects the business we are in today – a low cost, flexible travel business operating in an increasingly competitive market.”
But agents have reacted angrily to the move. One agent, who wished to remain anonymous, told TravelMole that they would switch-sell away from Thomson’s accommodation-only products.
The agent added: “Although we saw this coming we thought it was going to be cut down to eight, seven or six per cent, but not scrapped altogether.
“What it is going to do is drive people to book direct, which I guess is what they want.”
The revised agency agreements also mean that from January TUI UK will no longer pay commission on fuel supplements and air passenger duty, but the group says it would not cut base rate commission on package holidays.
In a statement TUI UK added: “We will be making it very clear in our conversations that we have no plans to restrict access to stock for our key third party partners.”
Report by Ginny McGrath
Ginny McGrath
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