Thomson to slash commission to 7%
By Darren Cronian on Tuesday, November 29th, 2005

Thomson became the first travel operator to reduce its basic commission to 7%. With revenue dropping year after year will 2006 see more travel agents go into administration, only time will tell. I don’t pretend to be an expert, I’ve only worked in this very diverse industry for the last three years, but what I see from an outsider, are companies afraid to diversify, and research other ways of bringing revenue into the business.

There never is an instant solution, but smaller travel agencies have to realise that the internet is the doorway into the future. It makes me sad that travel agents are going into administration you don’t want the experience and knowledge taken elsewhere into another industry.

Only six months ago I was speaking to a small independent travel agent (ABTA approved of course!) based in Liverpool - he didn’t know which path to turn, he had one “specialist” telling him to go in one direction and another “specialist” telling him to go in another.

I am not a specialist, but I have gained experience in marketing an internet business with some success, but I spoke with him, and went through how the internet works. Once there was an understanding, we discussed web design, and how you can get traffic from the search engines, and very quickly if you are willing to go down the PPC (Pay Per Click) path.

Surely this is basic business sense, you spend £500 on PPC advertising, and in return sell five holidays. A profit has been made, and you don’t have to rely “as much” on passing trade coming into the travel agent. Whilst this solution appears simplistic - getting the site ranking in the search engines without paying for advertising takes time, effort and loads of patience. In the meantime though whilst you are building this presence on the internet, you can pay for advertising, and slowly reduce it as the search engines start to refer holidaymakers to your website.


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One Response to “Thomson to slash commission to 7%”

carolmc | 29 November, 2005 at 7:31 am

In Ireland we have a travel agency called Steins and about three years ago they saw “the writing on the wall” and changed how they do business. They only kept a small shop/office and all of their business in now on-line. They have built up a huge database of customers, regularly e-mail “specials”, run competitions etc and they are a much more successful Travel Agency now than when they followed the more “traditional” route.
So, the lesson here must be to change with the times or go under.