Tied up in knots

(24 February 2005)

ABTA has admitted its hands are tied over tackling web discounts by operators which undercut and disadvantage high-street travel agents.

Newman Street has investigated the matter on behalf of members but can’t act due to anti-competition laws which cover price-fixing.

The association’s trade relations group met last month to investigate the issue following complaints from travel agents.

It discussed the introduction of a code of conduct covering operators’ online direct discounting, which could have included discount restrictions and rules on minimum pricing. But ABTA says it’s powerless to act as it is bound by the Competition Act 1998 which means it is unlawful for it to get involved in restrictions on price.

Travel Weekly decided to investigate the scale of price undercutting on the web following renewed complaints from agents that customers are returning to stores and demanding price matching when they discover their holiday booked through a travel agent is cheaper online.

In a survey of random multiple retailers, we found 75% of prices offered in-store for the agent’s own tour operator could be beaten online.

First Choice was the worst culprit, undercutting its own retail staff by £47.80 on a randomly chosen short-haul holiday and £115.60 for a long-haul trip.

Going Places was the only agency which offered a cheaper price in store with £40 off a long-haul trip but the short-haul holiday tested was £25.90 cheaper online.

Thomson offered a cheaper online price of £70 for short haul and a like comparison for long haul was £100 cheaper.

Thomas Cook offered the same price for short haul, but undercut the store price for long haul by £145. All prices relate to holidays for two people.

ABTA chief executive Ian Reynolds said the association was able to tackle issues that concerned non-members, as it did recently with British Airways, but said it could not get involved in commercial matters of members. “It’s the reality of price. It’s not always a fair world,” he added.