Collette Vacations has reaffirmed its 4-year-old no-discounting policy, which the company acknowledged had not been strictly enforced in the past year.
"Back in November, business was tough," said Eric Welter, Collette’s senior vice president of marketing. "People were doing the discounting. We weren’t super firm with curbing and controlling that. We were sympathetic … we were a little lenient."
After smaller agencies complained that they were losing out to online travel agencies purely on price, Welter, along with Collette’s president and CEO, Dan Sullivan, called between six and 12 OTAs earlier this month to let them know that the company was reaffirming its policy on discounting.
That policy, established in 2006, precludes Collette’s travel partners from advertising a discount or implied discount on its published tour prices.
AffordableTours.com was among the companies Collette called.
Rod Fernandez, co-president of AffordableTours.com, said that what Collette did last year "was say, ‘Oh, gee, sales are down; you can do whatever you want. We had a policy, we got lax about it because sales were low.’ And now they’re going back to the policy."
Fernandez said he agreed to Collette’s reaffirmed policy of not advertising any discount at all. But, he said, "I can offer a value-add. It’s almost silly. It comes down to nomenclature. I can turn around and say, ‘I can offer you a Visa gift card if you book this today.’"
Fernandez said that as he understood it, Collette allows for a value-add to represent up to a 5% discount on the tour price.
"I don’t care what I call it, as long as I get to do it," he said.
He added that last year he was discounting Collette product by as much as 10%, and that while he might lose some Collette bookings by not being able to advertise any discount now, he would make up some of that loss by recouping more of Collette’s commission.
Sue Lobo, operations manager at Atlas Cruise and Tours, which hosts AtlasTravelWeb.com, said, "We do not advertise any discounts on our website. It’s not in our business model unless we’re dealing with a past passenger; then we normally do extend some type of concession."
Asked what type of concession Atlas offers, Lobo said, "For a tour client, we might offer complimentary transfers, insurance or a percentage off of the tour price."
Tauck World Discovery put a policy in place in 2004 under which no retailer is allowed to advertise or promote Tauck products, online or in print, at a price or percentage less than Tauck’s published tour prices.
"The move was made by Tauck in order to control how our brand is presented to the public," said Tom Armstrong, the operator’s corporate communications manager. "We’re an upscale brand with a reputation for quality, and we were concerned that having others market our products at sizeable discounts was beginning to have a negative impact on the brand and our reputation."
AffordableTours.com does, however, advertise 10% discounts on products from Trafalgar Tours, Insight Vacations and Globus Family of Brands. TouringForLess.com has a paid listing on Google promising "30% more off Globus Tours," and its website says it "offers tours from the most desired tour operators at the largest discounts."
Neither Globus nor Trafalgar had returned requests for comment about their discounting policies by press time.
"Some companies want a lower price for the consumer, and they don’t want to do it themselves," Fernandez said.
He added: "We wouldn’t work with any company that does not allow you to offer any type of discount. At the end of the day, what some travel agencies don’t like is companies giving big discounts, 10% to 15%. Most travel agencies would like to say, ‘I can discount this 50 bucks,’ some small token amount, so that they can close the deal."
Given Collette’s reaffirmed policy on no discounting, Fernandez said he was torn. "I’ve seriously considered not selling Collette anymore," he said. "How can you run an organization where you’re constantly changing your policy?"
In response to Fernandez’s concerns, Welter said, "We would love to have all our online partners and continue to work with them, but we have a lot of customers to protect. If the only value of their business model is to discount and to close the customer by discounting, … we’re hoping that [AffordableTours.com] still finds the value that Collette offers."
He added that the plight of the online agencies is that "they’re really fighting within a small group of themselves."
Welter suggested that online agencies look to Collette’s preferred-supplier partnership with AARP, which allows for discounts of up to $100 per person, or to the company’s free private airport transfer service as ways to add value.