Top operators ignore ABTA’s travel advice

The multiples have shunned ABTA’s Sun City convention and its pleas for a halt to discounting policies

The South African sunshine may have won the hearts of delegates at travel trade association ABTA’s 42nd convention last week, but the hearts of the marketing chiefs at the biggest companies were not there to be addressed, even though they now control most of the market.

The news that the onward march of the multiples across the travel agency landscape has reached another significant sales milestone was delivered to an audience of travel agents, minus delegates from the two biggest multiples, Going Places and Lunn Poly.

New figures from Stats MR, presented to an audience largely made up of independent travel agents, revealed the top five multiples now account for 60 per cent of all summer packages sold through agents. It’s the first time that figure has reached over 50 per cent across the year; independents, though beaten on advance sales, have until now hung on to a majority share of late sales in the summer months.

The figures show growth of the top five from just over a quarter of the market in 1986 to half by 1991, and a steady climb thereafter.

But marketing directors from all the major travel firms were thin on the ground at the South African venue of Sun City. And that despite the fact that the country is without doubt in a period of enormous growth as a tourist destination.

In fact, one of the few to appear on the delegates’ list was Richard Carrick, who announced his resignation from Airtours on the second day of the conference – from the UK.

So, ABTA president Colin Trigger’s strongly-worded criticism of discounting policies, driven by the multiples, did not so much fall on deaf ears as any relevant ears at all.

“The world – if not the consumer – must think us a curious industry indeed, when we announce price increases for 1996 holidays and, just a few weeks later launch new programmes with immediate discounts, apparently greater than the price increases. I will not comment further on the apparent Alice in Wonderland aspect of this policy, for that is a matter for the appropriate shareholders to judge.”

That rhetoric and the phrase “suicidal tactics” won Trigger a few column inches in the national press. But the criticism is not new, and has not been heeded before.

There were pleas from independent operators at the convention to stop the sort of discounting that pushes up the multiples’ market share, but also reduces margins throughout the business.

Although Thomas Cook was represented, marketing director Dido Harding was not present. David Orchard, Thomas Cook’s director of information technology was, however. He gave a speech on the relevance of new technological developments to travel agents. It coincided with the launch of a new global CD-Rom database for travel agents, which is a joint venture between the Thomas Cook group, Philips Media BV and South African-based multimedia software organisation company Leisureplan.

Thomson did send a small posse which included Thomson Tour Operations sales director Steve Allen and Martin Brackenbury, director of development and human resources of the Thomson Travel Group. Its retail arm was not on the list.

Numbers of delegates at the ABTA convention, at just over a thousand, were well down on previous overseas venues. For the past four years the association has held its annual events at domestic venues and attracted similar numbers.

Since July last year, ABTA has been a voluntary organisation. It has, however, lost virtually none of its subscription revenue. Despite the obvious divisions which exist, primarily between the multiples and independent travel agents, it is still useful for the industry overall as a lobby which can modify impending legal changes. Its logo is also firmly implanted in the consumer’s mind as a bulwark of holiday protection.

So is it the desire to be seen saving money earned on those increasingly squeezed margins that kept marketing directors away? Could it be the distractions of restructure in various marketing departments in just about all the major travel companies? Or is it just that the large companies are happier to close their ears to the squawking of the independents? We ought to be told.

Meanwhile, talk of the current Office of Fair Trading investigation resulting in a break-up of tour operator power is far from optimistic. The big stick of the OFT has been wielded once already – without any evident benefit to independents. The investigation is viewed by many as token and unlikely to result in a submission to the Monopolies and Mergers Commission.

On another note, talk of independents attending the convention to broker mergers, sales and buyouts was rife. One session was entitled: Buying and Selling your business – Avoid the Pitfalls.

But if they were hoping to sell to one of the bigger operators they would have done better to take the ferry to Dublin, where the marketing department of Britain’s largest multiple – Lunn Poly – was holding its own meeting.

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