Operators wary as new group is launched

Operators have reacted with caution to the creation of a super-consortium which is pledging to adopt an aggressive directional selling policy for partner suppliers.

They said they remained to be convinced of the new approach and must see evidence of increased sales before embracing the new group.

The cautious response came after Triton Travel Group – a new alliance company formed by Advantage Travel Centres, Global Travel Group and Worldchoice – said it would instil discipline but without dictating to members.

Advantage managing director John McEwan said the discipline would come from a new selling system which will make it clear why members should support certain operators. 

But Argo holidays group long haul managing director Chris May said the alliance had “one gaping hole” – how it would deal with suppliers.

“That has always been their achilles heel. The thinking is spot on but if this is going to work there must be discipline that suppliers will respect,” he told TravelMole.

“It’s all very well saying they have the technology but let’s see how many agents actually take any notice of it. And a larger number of agents does not necessarily mean better or more efficient. If I am having to deal with 1,800 agents that’s a lot of brochures, duplication and correspondence. I am concerned at the potential wastage.

“The big win would be if Triton could identify agents who are potentially supportive of Argo,” he added.

Demanding higher commission would also backfire, he said, as higher commission would inevitably result in higher prices and force customers to bypass the agent and go direct.

Libra Holiday sales director Paul Riches said targets should be set – with those failing to comply expelled from the group.

“The only way of ensuring discipline is if members are contractually obliged to sell preferred suppliers,” he said. “At the moment membership fees are an important revenue stream for consortia. But Triton is talking about joint buying power which should bring other financial benefits and not leave them so dependent on fees.”

Sources at First Choice – which has a fractious relationship with the consortia – said the new group “would make no difference” to its policy of cherry picking the most supportive agents.

“They are all talking about dynamic packaging which hardly sends out the right message to operators,” one source said.

Industry observers said the rationale behind the alliance was sound and potentially beneficial – but it’s success far from guaranteed.

“Pooling resources such as technology, which is expensive for independent groups, make good business sense,” one said. “But operators will eye this with a degree of cynicism and suspicion. Cynicism because the group is pledging more support to preferred suppliers without dictating policy and suspicion because Triton talks of greater commercial power. Does that mean they will bleed operators for more commission?”

Another source told TravelMole that without dictating to members, the directional-selling pledge was fundamentally flawed.

“Technology, however sophisticated, does not make the decisions. If an agent doesn’t like an operator, it won’t sell them. Take Airtours’ tie up with Advantage a few years ago. Members were given a raft of incentives but they just weren’t interested. Sales were dismal.”

Triton is officially launched on October 1 and will comprise a six-strong board made up of two representatives from each of the three consortia. Chairmanship will be on a rotational basis with Worldchoice chairman Colin Heal first up.

Report by Steve Jones

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