Operator accused of ‘hypocrisy’ over commission cut

ABTA Convention special report: A full scale row over Thomson’s commission cut to 7% led to the operator being accused of hypocrisy during a heated debate at the ABTA Travel Convention.

Lowcostbeds.com founder and former Going Places managing director Paul Evans demanded that Thomson sales director Miles Morgan “cut the bullshit”  and be straight with agents over the real reason behind the trimming of base commission from January 1.

Evans, who was also boss of First Choice, said Thomson’s claim to want to work with agents was simply a smokescreen and that the operator planned to push as much business direct as possible.

“There’s so much hypocrisy here. Commissions are going to be cut much more and the savings will go towards direct marketing. Why don’t you cut the bullshit and just be straight instead of pretending there’s a nice little game going on here?” said Evans.

“You’re moving towards 50% of your bookings being online and you’d prefer it to be 100% because the money would just drop nicely into your bank account.”

Meanwhile, Co-op Travel Trading Group chief operating officer Mike Greenacre claimed that the actual commission agents would earn from Thomson would be 5.75% once non-commissionable elements such as fuel supplements were added in.

“If business becomes unviable we’ll see a wholesale exit of travel agents from the market,” said Greenacre.

Morgan defended what he described as a “conscious decision” and its timing just prior to the convention, saying: “We didn’t want to hide from the issue.”

He said the 7% rate would apply to agents who don’t produce much business for Thomson. “We will pay more but not at the levels we paid before,” he told a packed auditorium in Marrakech.

Morgan denied that the savings would be ploughed back into increasing profitability, saying: “This is not about Thomson profiteering. This will be forwarded onto the customer for better prices.”

And, highlighting that Thomson is a headline sponsor of the convention and hosted retailers to the event, he added: “We are still keen to work with the trade.”

He also denied that Thomson had any plans to follow Irish sister firm Budget in abolishing commission altogether, but added that the operator was always “keeping options open”.

“I can’t say where the business will be in 12 months time,” he told delegates.

by TravelMole reporters

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