Thomson cuts commission to 7%
ABTA Convention special report: Thomson is slashing commission to 7% in January in a move that’s likely to be matched by other major operators.
The company’s announcement coincided with the ABTA travel Convention in Marrakech.
The new 7% starting rate of commission will apply from January 1, 2006 – down from a standard level of 10%.
The company said: “Thomson has already opened negotiations with many of its trading partners and has reached a successful conclusion of commercial terms with Thomas Cook.
“This involves significantly lower commission rates for Thomson and an equivalent agreement for Thomas Cook.”
Explaining the move, Thomson said this was “a new step in its drive to reduce costs and improve its competitive position, notably against the new forms of holiday taking.”
The company added: “Over the last year Thomson has completed a major restructuring, moved its head office from London to Luton, cut thousands of jobs and invested in web development.
“Distribution costs, however, remain uncompetitively high. The Thomson strategy is to reduce distribution costs and to regain control of the pricing of its holidays.”
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