CCS plans spark direct-sell fears
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Sophie Griffiths. PLANS BY Complete Cruise Solution to alter commission levels have raised fears of a big expansion of direct selling. The trade arm of P&O Cruises, Princess Cruises and Cunard refused to give details of the changes as TTGwent to press, but agents fear commission levels could be cut by as much as 10%. A source at CCS said: “We are going to be look- ing at agent remuneration. There will be a sweep of changes in our commercial relationships.” CCS is expected to argue that the commission
Relations between CCS and the trade have been strained before, but CCS bosses have always insisted they reward top-selling agents. Strains surfaced in June 2009
when CCS sales director Giles Hawke told agents “no one owes anyone a living” and that those that “want to drink champagne should
start thinking champagne”. Tensions continued when CCS held talks with a number of agents about reducing credit terms from one month to one week. But in April last year, Hawke said
CCS was looking at making better deals available to smaller agents and giving them opportunities at
Merger ruling can’t be hurried
A DECISION on whether to allow the retail merger between Thomas Cook and The Co-operative Travel will not be made before mid-August even if it is fast-tracked to the Competition Commission. Cook and the Co-op this week asked for the merger to be dealt with by the Competition Com- mission instead of the Office of Fair Trading in an attempt to speed up the process. The OFT is considering the request to fast-
track the merger to the commission and will not make a decision until March 1 at the earliest. Initially, it had until April 4 to decide, so fast- tracking could speed up the process by a month. But even if the OFT agrees to send the merger to the commission on March 1, the clearance
04 18.02.2011
process is likely to take until mid-August. A Competition Commission spokeswoman said its statutory period for a merger review was 24 weeks from the date of referral from the OFT. “It is possible the process can be streamlined in smaller mergers where there are only a few interested parties, but in this case it would probably take the 24 weeks,” she said. Cook chief executive Manny Fontenla-Novoa said there was “compelling rationale” for clear- ance, adding: “We feel proceeding straight to the Competition Commission should provide us with the right answer most quickly.” An OFT spokesman said only that it had until April 4 to decide on the Cook/Co-op application.
changes could help combat discounting in the industry, and meetings were held with agents throughout the week to explain the plans. But some agents believe the move will lead to them being bypassed in favour of direct selling. Peter Cookson, managing director of Spear
Travels, said: “It’s utterly crazy. It’s absolutely clear they want to get rid of high street travel agents. If they cut commission from 15% to 5%, no agent will be able to survive on that. “It is not the high street agents that have created the problem – it’s the cruise lines who
certain times of the year. This week’s revelation of a “whole sweep of changes” to CCS’s commercial relationships with agents could be the toughest test of the relationship yet. What do you think? Email
ttgletters@ttglive.com or comment at
ttglive.com
Agents fear commission levels could be cut by 10% for Cunard cruises
give the better deals to the cruise clubs. We’ll switch sell and deal with cruise lines that support us; there’s plenty of capacity out there.” Seamus Conlon, managing director of
Cruise.co.uk, also said he expected direct sales to increase because of the move.
Another agent, who did not wish to be named,
said: “This is just a move to lead toward more direct sales. It will lead to a number of agents suffering and choosing not to sell cruise because they won’t make any money from it.” Another agent said it could lead to a change in clientele for P&O, Princess and Cunard: “CCS will get the quantity, but not the quality.” CCS sales director Giles Hawke said CCS under- stood change could create uncertainty. “We ask agents to work with us on this, and give us time to show them how well the new approach deliv- ers for them. We will continue to support agents who want to develop their business with us. This is a positive opportunity for agents.”
Spanish hotels accept Cook offer
SPAIN’S MAIN regional hotel associations have accepted an offer from Thomas Cook in the row over 5% discounts imposed by the operator. The Confederation of Spanish Hotels said Cook had contacted the affected hotels and had agreed to increase capacity with them. If the extra capacity did not bring in revenue equal to the 5% deduction Cook imposed in its summer bills, Cook said it would reimburse the difference by the end of November, and if it was unable to increase its capacity in certain hotels, it would make up the 5% by the end of March. Cook confirmed an agreement was reached.
18.02.2011
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