Crisis causing direct-sell operators ‘to review business model’
Luxury tour operator Lusso has been approached by small direct-sell operators looking to transition into an agency model.
Speaking on a webcast with Travel Weekly’s sister brand Aspire, managing director James Weaver said the pandemic had caused many businesses – operators and agencies alike – to review their existing models.
“Interestingly, we’ve had one or two smaller tour operators that sell direct approach,” he said. “They’re saying that they might want to switch some of their model as they’ve been looking at their business model.”
He said this had resulted in those businesses setting up agency agreements with Lusso.
“Companies are reviewing their business models and assessing the risk they take on as principle,” he explained. “We’ve set up an agency model for those businesses.
“There will be businesses that also have geographical limitations – they have a good number of their database but only sell a current section of the world, so they come to us for other areas where they don’t contract.”
Weaver said he believed many agents who dynamically package under an Atol would likely be reviewing this too, and as a result he believes these agents will move to book packages through a tour operator in the future.
“The volume that tour operators do through suppliers naturally means we have commercial weight to negotiate if needed,” he said. “Agents put huge risk on themselves when using their own Atol.”