Antagonising your trade partners seems a strange strategy, says Miles Morgan, managing director of Miles Morgan Travel
Travel Counsellors is now a long‑established business built by a pioneer and maverick of our sector, David Speakman. It has grown to demonstrate a wonderful business model and now stretches around the world – quite an achievement and one I admire greatly. Its agents are independent and thrive on that.
So, I found the comments from the group’s recent conference somewhat at odds with its ethos. Firstly, the need to move business from third-party operators to its in-house tour operator, Phenix. The conference is attended by operators that pay a handsome fee to do so. Nothing wrong in that, but when the delegates are told to switch business away from the same operators who fund the event, it seems a tad cheeky.
Likewise, for Travel Counsellors’ agents, I thought the ability to sell what they deem right for their clients is what they are all about. Perhaps the comments were taken out of context, but it appears an odd approach to both supplier relations and its all-important independent agent sales philosophy.
Jet2holidays is another brand that has grown at quite some pace over the past few years. I love its simple back-to-basics approach to holidays, its market-leading prices, and how it promotes and markets its virtues in a common-sense way that appeals to its target market. Simple, but genius.
Its recent conference for agents included a rallying cry for the high street, focusing on business rates as the challenge. For me, internet pricing and discounting is the far bigger challenge. So, while I applaud the idea, it would be better for Jet2holidays to fully support high street agents with price parity to solve the problem. This would have a huge impact for independents, giving them greater levels of support and positioning Jet2holidays as agents’ number-one firm in the package market. Come on Jet2, level that playing field!
Thomas Cook is the third story that got me thinking this week. It’s so sad to see the leading travel brand in the UK deliver a second profits warning in just over two months. It is firmly trapped between Tui, with its vast in-house product range controlling both quality and margin, Jet2holidays, with its low-cost base and highly aggressive pricing on mainstream hotel, and a newly-invigorated easyJet Holidays. Add in the successful OTAs such as On the Beach, and Cook’s predicament becomes obvious: high legacy costs with shops, salaries and pensions, and low levels of own-controlled hotels to improve margins.
So where should it go now? I suggest Cook should get out of aircraft leasing and ownership and move to a more premium travel agency flexible model. It should ride on the back of its classy ‘power brand’ status, as I can’t see it scaling quickly enough to match Tui or cutting its costs to match Jet2holidays.
As ever, these thoughts are from an old guy in the West Country with some shops. PS, my money is on Harry Redknapp!
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