NEWS


Simon Applebaum (left), dnata Travel Group, and Alistair Rowland, Blue Bay Travel


‘Aggressive’ long-haul pricing hits agents but overall demand strong


Juliet Dennis


Margins on long-haul sales are being hit by ‘earlier’ peaks discounting by airline operators but strong demand overall is leading to record-breaking sales for high street retailers. Reports of “incredibly aggressive


pricing” by airline operators and OTAs were flagged by Simon Applebaum, managing director of dnata Travel Group UK B2B brands, who said the tactic was forcing agents and operators to price match more than usual so early in the peak sales period. Speaking on a Travel Weekly


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you are into a world of bartering and trying to get the deal done with them.” Applebaum said “one or two” airline


operators were offering lower margins than necessary for the second week in January because they had experienced a “softer” December than anticipated, adding: “I don’t think it’s helpful.” He stressed dnata’s operators,


which include Gold Medal, were trying to help agents price match by offering different dates, routes or added value, but said a combination of agent and operator margins


usually had to be cut. “Agents are fantastically resilient


webcast, he told editor-in-chief Lucy Huxley: “The challenge we see is on prices in the B2C arena. We’re having to work really hard with our agents to support them in closing bookings. “People are walking through


their doors, saying ‘I’ve seen this deal online, can you match it?’ Then


travelweekly.co.uk


and will overcome this challenge, but it makes it harder for them to earn a fair commission when using certain airlines,” he admitted. The sentiments were echoed by


Alistair Rowland, chief executive of tour operator Blue Bay Travel, who said some of the current low prices for long-haul holidays, particularly in the Caribbean, “made no sense”.


“Overall, the market feels very


price-led, with discounts a little higher generally, and less high-value bookings in the mix so far,” he said. But he was hopeful the market


would “rebalance” in the next week with prices returning to more usual levels for peaks. Designer Travel managing


director Amanda Matthews said the challenge of airlines “flexing their direct discounts”, predominantly in the long-haul sector, was “no different” to any other January. “We’re having a better-than-


expected peaks, but the challenges are the same as always: in January it is very aggressive,” she said, adding agents had to settle for lower margins and increase service levels to close sales. She noted: “There are times when you have to say to a client ‘if we book this, we will lose money because they [airline operators] are giving away flights for free’.” Overall, agents continued to


report strong sales, with both Hays


Travel and Barrhead Travel enjoying a record-breaking weekend. Hays said freezing temperatures


nationwide failed to put customers off visiting branches, with more than a third of customers who booked over the weekend new to the company. Jonathon Woodall-Johnston, chief


operating officer, said: “We are seeing a small upturn in average spend.” Long-haul demand continued to


grow while cruise sales picked up after a “slightly slower” start, Hays said. The Barrhead Travel Group had


a record sales day on January 11, surpassing the final Saturday in January 2024. More than half of bookings have been for summer 2025. The Advantage Travel Partnership


described Saturday in particular as “considerably ahead” of the previous Saturday, but noted “mixed feedback” from members. David Moon, head of business development, said: “Some [are] reporting business is good, others that, while demand is building, it is slightly slower than expected.”


16 JANUARY 2025 5


PICTURE: Shutterstock/icemanphotos


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