Kuoni under fire from trade for 10% online discounts
The move came as a shock to agents, who said they could not compete with the tour operator's online prices and that it would be pointless selling Kuoni's holidays over the weekend. At least one said it would be reassessing its relationship with the operator.
It is understood agents receive around 10%-12% in commission payments from the operator.
Kuoni, which already offers 5% off selected holidays booked online, said the?change was a tactical move on selected properties in Sri Lanka, Thailand and the Caribbean over the bank holiday period for 2011 departures. The offers, which went live on its website today, include seven nights bed and breakfast at Mount Lavinia Beach hotel in Sri Lanka?for £598, which includes a 10% online discount.
Kuoni UK managing director Joanna Edmunds said: "This is an online tactical offer to try to generate sales for these properties over this period, responding to anticipated competitor activity. This offer is not available through any other of Kuoni's distribution channels."
She added that Kuoni continued to work closely with the trade who are "key" to its distribution strategy.
But Nick McKay, managing director of Travel Designers in Clapham, London,?which is a specialist Kuoni agent, said: "I am shocked and surprised by this. We have previously had a strong working relationship with Kuoni. We hope to continue it but with action like this we will have to reassess how we work with them. I think it's a case of having their cake and eating it."
Agents also questioned Kuoni's loyalty to third-party agents. The operator has so far opened up 13 of its own stories nationwide and is working with selected agents to open dual-branded shops. It has always stressed its shops are in areas where they will not compete with agents selling Kuoni holidays and has previously denied any strategy to increase UK direct sales, reported?to be 58% a year ago.
Leon Shaier, senior travel consultant of Edwin Doran Travel in Twickenham, Middlesex, said: "It's a very short-sighted attitude unless they are intending to cut agents out of the equation. Agents?cannot compete with these prices. The problem we have is when someone books with us and then looks online afterwards; it makes us feel very uncomfortable."
Barry Moxely, group managing director of Traveltime's seven branches, said: "Companies that are not offering a level playing field are not actively committed to selling through the trade. It's inconsistent to expect agents to sell holidays of a company that offers a 10% online discount; it's not commercially viable to support these companies."
But Gemma Antrobus, managing director of Haslemere Travel?in Surrey,?said agents had to get used to operators discounting online and offer other services to retain clients. She added: "We are faced with online discounting all the time, whether it's 5% or 15%.?What makes us different as an independent agent is the quality of the service that we offer our clients; we have to show clients we are better."
Meanwhile, rival tour operators were quick to react, with Western & Oriental Travel sales director Steve O'Loughlin promising not to undercut agents. "Everyone is having a tough time and agents will be riled by this sort of behaviour. Our prices online are the same as those offered by agents," he