Steve Jones’ Say

Steve Jones takes issue with the preferred deals that are so ubiquitous in the travel industry, and the limitations it puts on agents giving consumers all their options.

THEY are part and parcel of the industry, but I have a problem with preferred deals. Or at least in the concept of preferred deals. From a wholesaler and tour operator perspective they are, of course, sought after and cherished. Which company wouldn’t want the might of 800 Flight Centre shops behind them, recommending and selling their product, even with the costs of servicing a network considered?

But can a travel agent really characterise themselves as independent, as many do, when they are only selling a select band of preferred suppliers?

I mention Flight Centre only because Chimu Adventures recently struck an agreement with the retailer that will make the polar specialist its “one-stop shop” for those regions and beyond. Little wonder that Chimu described itself as “so happy” as it looked forward to “the opportunities that it will bring both parties”. Good on them. Flight Centre agents in particular will rarely stray from their preferred list, so an uplift in support would seems inevitable for Chimu.

But it reignited my scepticism about preferred arrangements. Is effectively turning your back on product because there is no formal commercial relationship compatible with being an independent retailer?

Agency head office always talk about leakage, those agents who sell outside the list of commercially-negotiated deals. But they can’t have it both ways. They can’t champion the independence of their agencies, and in the same breath clamp down on non-preferred sales.

Looking at all options, not just what you’re told to sell by head office, is what makes agencies truly independent.

The travelling public have little understanding of these arrangements of course. Yes, the internet has provided transparency in that consumers can do their own research and book with whoever they choose. But many Australians are still buying their travel through bricks and mortar agencies, and relying on their advice and recommendations.

This isn’t to suggest consumers are getting shoddy service, or being coerced into booking holidays that are unsuitable. But they are not being offered the full gamut of available options.

For traditional wholesalers, unless they have an extremely strong and visible online presence, a failure to secure a preferred deal with at least one agency network clearly limits distribution, and possibly their viability. It’s a tough game.

Meanwhile, full marks to TravelManagers which has struck a deal with e-commerce firm Luxury Escapes (LE).

I couldn’t agree more with TravelManager’s chief operating officer Grant Campbell who told the industry at its annual conference that it needs to “stop looking at these kinds of business as travel disruptors to the industry” and see how it can work with them.

What a refreshing change to hear some maturity in the industry rather than the infantile, anachronous and frankly conceited view held by some that everyone else is a charlatan unless you’re a traditional travel agent. It’s 2018, not 1978.


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