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Commission cuts: ‘The trade understands our position’, insists Thomson
Thomson UK retail and commercial director Derek Jones has claimed it has received a “measured” approach from the trade as the dust settles on its move to cut commission.
After a series of meetings during the ABTA convention in Marrakech, Jones said many retailers understood the operator’s position that it needs to cut distribution costs.
Agents were also were “unsurprised” at the development, said Jones.
“They may not be comfortable with the impact it will have on their business but from a strategic position, all recognised that we need to reign in distribution costs and regain control of our pricing.
“There has been a measured response and we have had a number of productive meetings.”
Asked to comment on Triton Travel Group’s remarks that it “will not accept 7%”, Jones said individual agents and groups will consider their own position.
Jones stressed that Thomson does still value third party agents and needs to work with them.
He added many retailers were waiting to see how other operators reacted before making any firm decisions on future commercial terms.
“It’s one thing to take a position with us but I think they had one eye on what other operator’s would do,” said Jones.
He reiterated comments from sales and marketing director Miles Morgan that savings would in the short term be passed onto customers.
Jones said overall savings from the commission cuts would be “significant” but he declined to reveal specific figures.
The move by Thomson will see it priced more competitively than rivals over the post Christmas peak booking period. While First Choice and Thomas Cook quickly followed with 7%, it came too late to impact prices for the next edition brochures which will soon be launched.
But Jones said any pricing advantage may be short-lived.
“Tour operators have a range of fluid pricing mechanisms,” he explained.
Report by Steve Jones
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