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Thomson will turn the screw following Morgan departure
Sunday, 16 Jun, 2006
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Comment by Jeremy Skidmore (www.jeremyskidmore.com)
You could almost hear the champagne corks popping in agencies around the country when it was announced that their nemesis, Miles Morgan of TUI, had lost his job.
Retailers hate Morgan and with some reason. He was the man who announced Thomson would be axing commission to them.
Of course, it was just business. Morgan is actually a very nice bloke and good at his job. But when that job involves affecting the livelihood of others, as cost-cutting inevitably does, he knew and accepted that he would cop plenty of flak.
There was an hilarious side-show to this; ABTA had invited agents to pay around £81 a head to hear Morgan tell them how he was no longer interested in them. Who came up with that one?
From TUI’s viewpoint the policy might make sense, but asking agents to cough up to hear about another nail in their coffin is a bit rich. I wonder how many thomsonfly seats you have to sell to earn £81 in commission. Answers on a postcard.
Anyway, as Morgan takes his pay-off and contemplates a life of gardening in the west country, where does this leave retailers?
Anyone who thinks his departure may signal a shift in attitude at Thomson will be greatly mistaken. In fact, quite the opposite will happen.
Although seen as the devil-in-not-much-disguise by retailers, Morgan was nevertheless associated with agency sales, something that Thomson cares little about these days.
Under the new structure, more power has been given to Graham Donoghue, who is appointed new media director. The plan is very definitely to develop Thomson’s web and online sales capability.
“The web will become the primary distribution channel for all our customers, be they in shops, call centres or at home and it is vital we take every opportunity to exploit its potential,” said a statement. Enough said, indeed.
That likeable scouser Derek Jones will have responsibility for managing all retail and direct sales resources for the main tour operating business. In other words, he has to do everything in his power to push its own products, so you can expect even more business to be driven in house. Derek could charm his way out of any situation, but dealing with irate retailers, who will not get the deals that Thomson shops enjoy, may provide his greatest challenge.
Looking on, with a mixture of pleasure and envy, will be the other main operators. Pleasure, because Thomson is paving the way for them to follow in due course. Thomas Cook, MyTravel and, to a lesser extent, First Choice, are currently keen to keep independent retailers on side because they are still dependent on them for business. But I predict that won’t last.
They’ll be envious because they’ll be wishing they were strong enough to follow Thomson and go all out for online bookings. Out of the four big groups, Thomas Cook is arguably the biggest brand. But the company has built its offering around being an independent retailer (more a perception than reality these days) and is not ready to cut ties with smaller operators and agents.
Fast forward a few years and the big groups have far fewer shops, all of them dedicated to selling their own holidays. The remaining ‘independent’ agents have prospered by operating in niche markets, selling a limited number of operator partners. They are, in effect, the high street’s new vertically-integrated shops.
Meanwhile, Miles Morgan is running a successful little gardening business and, compared with the current crop of marketeers, doesn’t seem such a bad chap, after all.
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