THE Travel Corporation, which owns brands such as Trafalgar, Insight Vacations, Contiki and Uniworld, reports that its commission payments to travel agencies are up 30 per cent over last year, leading its president and CEO, Brett Tollman, to dismiss any notion that the days of the wholesale-retail model are numbered.
“I was at WTTC (World Travel & Tourism Council) summit in Abu Dhabi and some (consultant) from Boston Consulting Group stood up and declared that travel agencies are dead; the wholesaler is dead.
“Well, we’re having our best year ever and business with our travel agencies is up. Our travel agency commission payments this year are up 30 per cent over last year – highest than any year in our history,” he said.
CEO of Trafalgar, Gavin Tollman, said business from travel agencies in Singapore rose 71 per cent this year over 2012, a record-breaking growth rate in the history of the company and far surpassing the overall worldwide increase of 28 per cent for the brand.
“I believe in the agency distribution model, with a caveat. I believe agencies that do their job – qualify their customers, add value to the cycle, follow up, who are consultants and not order-takers – not only have a future, but can prosper unbelievably in the travel industry,” he said.
Asked why so many agencies in Asia are struggling to survive, Tollman said: “As in any industry, you have good and bad businesses. Some agencies focus only on selling, for example, cheap cruises. The average Uniworld commission is US$1,800 per booking, because 95 per cent are couples travelling together and we don’t do massive discounting. If more consultants sold our products, they would not have cash-flow problems.
“If you sell a package where you earn US$10 on air, US$30 on room, etc, you cannot make money. And to prosper, it’s not just about selling our type of product, you need to be knowledgeable, responsive…my father always said, there is no bad business, only bad managers.”
– Read the full report in News Analysis in TTG Asia November 15 issue
