How travel agents advertise discounts on tour products and what kind of discounts and incentives they provide their clients is a touchy subject.
The issue resurfaced this month during a tour operator panel discussion at the combined CruiseWorld 2010 and Home Based Travel Agent Show and Conference in Fort Lauderdale. The conversation got a bit heated when an agent in the audience asked Scott Nisbet, president and CEO of the Globus Family of Brands, and Trafalgar Tours President Paul Wiseman to defend the fact that their products are advertised on sites like AffordableTours.com at a 10% discount.
When Wiseman responded that, for one, online discounters like AffordableTours.com and TouringForLess.com don’t represent a major part of Trafalgar’s business, the agent retorted that “it’s not a big part of your business, but for all of us agents, it’s a big part of our business.”
At the center of the debate are larger online agencies whose model is to discount tour product, often cutting into their commissions to do so. Smaller agencies and home-based agents argue that when clients search online for companies like Globus and Trafalgar, they find lower advertised prices for the same product that agents are trying to sell.
Collette Vacations reaffirmed its 4-year-old no-discounting policy in March (which the company acknowledged had not been strictly enforced in the past year) after smaller agencies complained that they were losing out to online travel agencies purely on price.
Frank Marini, vice president of sales at Collette, who was manning a booth at the trade show, said that many of the travel agents at the show were asking about the no-discounting policy. “It’s been very positive for us,” Marini said.
But back at the panel discussion, Wiseman let the audience know “there are some very strict legal issues in this country about price fixing. What you do with your commission is completely up to you.”
Indeed, the most tour operators can do to control discounting is to create policies about how travel sellers advertise their discounts.
“We can charge whatever we want,” said Kyle Pope, president of TouringForLess.com . “By my understanding, it would be illegal for any of these tour companies to tell us how much we can actually discount. This is a free market. If someone wants to come onto the market and start discounting Globus at 15%, I’m not going to get mad. I’m going to figure out what to do to compete.”
Furthermore, Pope said, “a lot of brick-and-mortar travel agents like to disparage the nationwide travel sellers by saying that we’re not familiar with the product, that we don’t provide a high level of service. But to be fair, there are instances where a client gets a higher level of service from a company like ours, which is specialized exclusively in selling escorted tours of a few brands.”
And, he added, there are instances when clients would be better served by brick-and-mortar or home-based agents as well, “such as someone planning a honeymoon with a particular destination [in mind] but not specifics on what kind of travel they would like to do. We get these people, we tell them straight out, ‘We’re not geared to do that.’”