Operators must ‘broker like mad’

TravelMole Fast Conference Special: Operators must turn to brokering with suppliers if they want to stay flexible in a changing market, according to industry leaders.

“It has been our worst year since the company started 14 years ago, and this year there has been no excuse for the industry. For tour operators like us who have huge commitments we must change the model.” This is according to Nick Wrigtman, managing director of Tapestry Holidays, who was speaking at Tuesday’s TravelMole Fast Conference.

Mr Wrightman added: “Good brokering is the way forward. If we had taken 90% allocation in our hotels this year we could have saved ourselves £600,000.”

He said companies like Lastminute.com will do well in hard times because they have little or no committed allocation to fill and get stock from operators like Tapestry.

“It is embarrassing when a client pays £500 for a room and is next door to someone who paid £300. That was quite common this year,” said Mr Wrightman.

Joanna Yellowlees-Bound from Erna Low was in the audience and voiced her support. She said that as suppliers pushed for the direct sell, it was time for operators and agents to “broker like mad”.

Advantage Travel Centres managing director John McEwan was in the audience and said: “There is over-capacity because the vertically integrated companies have fixed assets that need to be filled. But they are slimming down, like MyTravel selling its ships and aircraft.

“Do you really need your own airline?”

But Mr Wrightman said that during good times, agents like Lastminute, that don’t have allocation could find conditions more challenging.

Vic Darvey is general manager of holidayandmore.com, part of the Lastminute group. He told the audience: “We get product from as many suppliers as we can, we are in control of our mark-up and can maximise our margins. There is a hell of a lot of stock out there.”

He later told TravelMole: “In the time I’ve been in the industry, which is eight years, there has never been a time when supply has outstripped demand.”

Advantage Travel Centres sales and marketing director Colin O’Neill was in the audience. He agreed with Mr Wrightman saying: “Nick is right about changing the model, we have to start looking at that.”

His colleague, Mr McEwan said: “The aggregate profits made by travel agents are pathetic when you look at the size of this business and how many people are travelling. We need to work positively together for change.”

But there are benefits to having control over suppliers said CTTG general manager, commercial Mike Beaumont, another panel member. He told the audience: “You are underestimating the power of the package holiday and the flexibility that tour operators can offer.”

Mr McEwan agreed: “There is a clump of people still buying a seven or 14-night package. Operators are selling over 15 million holidays a year still and while they might not be capturing the growing shortbreaks market, they still offer the package which is favoured by the majority of holidaymakers.”

Mr Beaumont added: “I think we will gradually see a client realisation of the benefits of travelling with a big company that can offer flexibility at the destination and a rep on hand.”

Andrew Brownrigg was another panel member. He is managing director of Haselmere Travel and chairman of AITO Specialist Travel Agents. He said his company was adapting by specialising.

He said: “The specialised sector is my future and I can’t see myself competing in the mass market. Transparency in the market and the growth of the internet means people know so much more about prices and products, we need to get close to clients and offer them added value.”

He said his agency was not charging consultation fees at the moment, but said he wouldn’t rule them out in the future if they became more widespread.

The event in London was attended by top industry executives including representatives from Advantage Travel Centres, Wexas International, CAA, Lastminute.com, Hoseasons, Erna Low and Cendant.

It was the first in a series of hard-hitting debates on industry topics moderated by travel journalist and ex-Travel Weekly editor Jeremy Skidmore.

The next debate is on October 26 and is entitled: Niche is the Word: Specialise to Survive. Speakers lined up so far are representatives from Norwegian Coastal Voyage, Advantage Travel Centres and Travel UCD technology consultants. It is at 28 Portman Place. For more details go to http://www.travelmole.com/fastconferences.

The standard delegate fee is £99+VAT with a special £59+VAT delegate fee for operators and agents. Students can attend for £49+VAT.

You can register online, email [email protected] or telephone 020 7691 3292.