Thomson severs ties with independent agents

Friday, 03 May, 2006 0

Thomson is to stop selling through “selected” independent travel agents and slash commission further with others.

The operator first revealed a cut in its base commission rate at last November’s ABTA Convention in Marrakech. The reduction to 7% came into effect in January, prompting rival operators to review their commission structures.

Thomson now claims that around three quarters of all its business is conducted through in-house channels – its website, call centres and holiday shops – after investing more in direct marketing.

Chief executive Peter Rothwell said the company is not prepared to pay travel agents high commission fees and wants to channel sales directly through its own high street shops, website and call centres.

Thomson claimed it was “forcing the pace of change” in the travel industry as consumers become increasingly confident about buying holiday direct via the internet. The company said it expected web sales in particular to accelerate over the next few years.

But leading independent agent Sue Foxall (Kinver Travel) said the move to zero commission had come as no surprise and agents were already dynamically packaging so were not reliant on Thomson.

She said: “I don’t know of an independent agent that is selling them anyway. We have been having a much better time without them and making more money because we are not booking Thomson.”

Her agency has booked just one Thomson holiday since commission was cut in January – and charged the customer a service fee to make up for the lost renumeration – against an average of 75 bookings during the same four-month period in previous years.

Foxall, Global Travel Group’s project development manager, said she did not expect the other major operators to follow Thomson because they do not have the same strength of in-house distribution and therefore need to deal with third party agencies.

Report by Phil Davies

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Phil Davies

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