Holidaymakers face the hard sell

TRAVEL agency chains have been ordered to give customers a hard sell on 'own brand' package holidays as the industry struggles to cope with the collapse in bookings since 11 September.

Britain's three largest holiday companies operate travel agents. Thomson owns Lunn Poly, Airtours is the parent of Going Places, and First Choice has the Travel Choice chain.

In the past, up to 60% of holidays sold by a typical travel agent in one of the big chains have been packages provided by the parent, known as directional selling.

But industry statistics show directional selling at record levels. Up to 80% of sales through Going Places and Travel Choice are for their parent companies. About 75% of Lunn Poly's sales are for parent Thomson.

The big operators are trying to boost profits by ordering High Street chains to focus sales almost exclusively on in-house products. Profit margins from directional selling can be as high as 30% for travel groups.

Where an agent is selling a rival operator's holiday, the only profit is the commission on the sale - typically 10%-15%.

One analyst explained: 'It's no secret that holiday bookings have dried up since the attacks, with sales down by about 40%. The big operators need to pick up what few bookings there are and they are instructing their travel agencies to give people the hard sell on their products. At times like this, customer choice goes out of the window. All that counts is the bottom line.'

An Airtours spokeswoman denied the company's policy had changed. 'We have always made it clear that Going Places supports Airtours. On average, directional selling is near 60% and that hasn't changed, although there may be odd weeks where it has been higher.'

Even Thomas Cook, which prides itself on offering more impartial advice than its rivals, is dramatically increasing sales of in-house operator JMC, aiming to reach the same level of directional selling as Thomson and Airtours.

A Thomas Cook spokeswoman said: 'For years we've tried to be the honest broker, but we're in a new world since 11 September and you have to get better at directional selling. Clearly, given the trading conditions, we have to sell more in-house products to restore profitability. But we're very transparent with customers.'

The major casualties of the holiday giants' new policy are tour operators without a High Street presence.

Bookings for Cosmos, which is reportedly for sale, and Libra Holidays have been hit because they rely on travel chains to sell their holidays.

Bookings plummet
HOLIDAY bookings for next summer fell by as much as 50% after the US launched air attacks on Afghanistan, says First Choice.

But the operator claims bookings are slowly recovering.

Chief executive Peter Long said its figures were a good barometer for the market.

'The biggest fall was at the beginning of October when the bombings started. Winter bookings were about a third down. Bookings for next summer peaked at 50% down. But we may have seen some bottoming out now.' First Choice, which is axing 1,100 jobs because of the bookings slump, plans to cut capacity for next summer by about two million holidays, taking six of its 32 aircraft out of the market.

Long said: 'People are deciding about travel much later. If you haven't got early bookings you will have more to sell late and prices will be discounted. Taking holidays out of the market should give firmer prices.'

Thomson Travel Group is this week expected to announce job losses. Rival Thomas Cook has already cut 2,600 jobs across Europe.