Tui promises new pricing and commission structure for trade

Tui is committed to striking workable commercial deals so agents can compete with its in-house agents and website, according to chief marketing officer Neil Swanson.

Spelling out details of Tui’s plans to establish closer working ties with independent agents across the UK, Swanson admitted the tour operator’s pricing and commission structures “hadn’t been working for a lot of independent agents” in recent years.

One of the biggest gripes of independent agents since Tui cut commission in 2005 and increased its focus on direct sales has been the fact they cannot compete on price with the operator’s direct prices online and in Tui shops.

More: Tui urges agents to ‘give us a chance’ as it outlines engagement plans

Speaking on a Travel Weekly webcast, Swanson said: “[Price] parity and commission go hand in hand as far as I’m concerned. Those structures we’ve had in place, between those two elements, clearly haven’t been working for a lot of independent agents. And we need to address that.

“We recognise we need new pricing and commission structures in place. In order to support this it’s got to work for both parties on a commercial basis.”

Swanson did not commit to overall price parity but pledged to address pricing issues in one-to-one commercial discussions with agents, adding: “Clearly it needs to work for them [agents]. It’s pointless if we don’t come up with something that actually works that people are comfortable with.”

Tui will be in talks with agents to strike agreements over the next two months after already successfully running trials with some consortia.

He said: “We’ve been running trials since turn of year, looking at some of the elements we’re talking about putting in place. We’ve had really good feedback on that. We’ll be looking to take those forward.”

Swanson described the operator’s ongoing work with the trade as “an evolution rather than a revolution”, and said the operator already had existing trade partners. He added: “This isn’t a big bang.”

In response to agent feedback on disparity of deposit prices, Swanson said the operator would ensure any cut-price or zero deposits were offered equally to trade and direct customers.

He said: “We believe all of the deposits that are available to our own retail shops are available to third party agents. If they’re not, we’re going to make sure that they are available so they’ve got exactly the same things in place.

“I completely agree in terms of making sure we’ve got low deposits available exactly in the same way as we’d have in our own retail shops; they should be there. There shouldn’t be £200 [deposit] for an agent and a low deposit available online. That needs to be addressed in exactly the same way, and it will be.”

He also insisted Tui would not market to any agents’ customers direct.

“It’s very important independent agents own their own customer. We will not be targeting any [agent] customers direct. They are selling our holidays. That would just completely undermine all trust and would be completely wrong,” he stressed.