It’s still September, but the heavy artillery is already heading for the front as tour operators in Canada’s fiercely competitive winter sun market gear up for another round of battle.
Air Canada Vacations fired a salvo yesterday, announcing a limited-time commission boost to 12% on all air and hotel packages. The offer is valid for bookings made by October 14th for December through April travel.
Meanwhile, Transat Holidays has gone on record saying it is putting its best prices forward this winter - leading off with low prices in hopes of boosting them later as inventory sells. And Sunwing Vacations is currently featuring a $200 per couple ‘Instant Cash Back’ offer for all winter holidays booked by October 6th.
As for Sunquest Vacations parent Thomas Cook Travel, just-released figures prior to year-end results reveal that mainstream travel sales in Canada are up 2% this year, slightly behind capacity. But the company acknowledges that, “Prices remain under pressure due to continued overcapacity in the market.”
Yes, it’s another Canadian winter travel season, with great deals for consumers and tight margins for operators and agents alike. But what about that ACV offer? Will it make a difference? Open Jaw put the question to some industry luminaries.
“Are you joking?” said David Biltek, Managing Partner of Grand Prairie, Alberta’s V The Vacation Store. “When everyone else is paying 8%, and someone comes along, someone who is clean, and decent, relatively speaking, and for us, where their air add-ons from Grand Prairie are $15… you bet!”
Dean Horvath, of Vancouver’s Mason & Horvath’s Elite Travel Experiences, agrees strongly with Biltek’s comments. “Air Canada Vacations has a great variety of hotels in numerous destinations, they fly from more cities in Canada than anyone else and they have business class. And yet, time and time again, I talk to travel agents that say they don’t sell ACV because of their low commission level. Every agent out there should move business to ACV while the 12% offer is available to prove to them that higher commissions will increase sales. In fact, if enough business goes their way during this promotion, maybe they’ll decide to keep the 12% as a permanent level.”
But Lesley Keyter of Calgary’s The Travel Lady is less impressed with short-term commission boosts. “Mmmm...extra commission hey? Yes, for us this is a carrot that smells good - 12% is certainly better than 8%. Unfortunately with on-again, off-again offers like this agents get used to booking the products that pay well consistently and they may not be significantly swayed by temporary offers.”
In fact, Keyter suggests that short-term commission increases could have a negative rebound effect on operators. “There’s a feeling that if they can offer us 12% for two weeks why can't they pay us 12% on an ongoing basis? Agents in the know are doing all they can to maximize revenue and if that means suggesting an alternative product they will certainly do so. So the benefit of this kind of offer is very short term - both to agents and tour operators.”
iTravel2000 boss Jonathan Carroll says business is already good out there for winter bookings, but he has no problem with commission boosts – short-term or not. “It’s definitely a good offer,” he says.
