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When it comes to battling an expected suffering travel market in 2009, two questions come to mind: how can suppliers entice consumers without coming across as desperate and what can they do to motivate agents?
First off, pretty much everyone Travel Agent spoke with on the subject has a difference of opinion on whether cutting hotel rates is a good thing.
Whereas some suppliers claim hotel companies such as Sandals Resorts, which is offering up to 55 percent savings and two free nights from now until December 22, are panicking, others such as Almond Resorts says consumers are savvy enough to know the definition of a sale.
“I think the world is accustomed to the idea of a sale,” Ralph Taylor, president and CEO of Almond Resorts, told us. “Even the best companies in North America have sales. If you offer a deal once in a while, you have nothing to worry about. People know there are times they will get a discount and others where they have to pay the full price. The only time a company can really hurt itself is when it offers deals all the time. If the product is discounted all the time, that means you basically have set an artificial price for your product and the customer will see right through this.”
The flip side to add-on values and discounted rates for consumers is incentives for agents. Travel Agent found that many major tour operators are offering bonus commissions throughout most of 2009. Whether some offer these incentives every year and others are new to the idea, it seems as though you can't go a week these days in the industry without hearing of a new supplier offering bonuses to agents.
"Overall, we think the best way to help travel agents to deal with the challenges in the current economy is to increase our efforts to promote vacation travel and stimulate demand,” says Ken Pomerantz, president and CMO of MLT Vacations. “On that front, we are working more aggressively than ever to market and advertise our brands and present compelling products and price points to the public. We have always used bonus commissions in support of our marketing and promotional efforts to provide extra incentive to travel agents when selling our products. Our current bonuses include an ongoing 15-percent commission on NWA WorldVacations land products to Hawaii to help stimulate and promote travel to Hawaii, and a 15 percent commission on all Continental Airlines Vacations land products to celebrate our recent acquisition of the Continental Airlines Vacations brand."
Certified Vacations Group Inc., which operates Future Vacations, among other brands, is offering cash booking bonuses and commission incentives at varying points throughout the year to stimulate bookings. For instance, Future Vacations typically pays up to 12 percent commission on Las Vegas bookings, but through January 31, all agents can earn 15 percent on all bookings to Wynn Las Vegas. As an added incentive, agents can also earn a $50 cash bonus on top of the 15 percent commission when they book air-inclusive packages of three nights or more to Wynn Las Vegas. Future Vacations is also getting set to launch a $100 booking bonus on packages to London. The booking window will extend from January through March for travel anytime in 2009. A five-night minimum stay will be required.
Pleasant Holidays is also getting in on the act by offering a 16 percent commission on all Caribbean bookings now through December 15 for travel now through next year. As is the case every year, Island Destinations is offering an additional 1 percent commission for bookings made and traveled from May 1 through December 15. This promotion, however, is offered in Island Destinations' low season and is not due to current economic conditions.
Stay tuned as Travel Agent continues to follow the ongoing influx of both consumer and industry incentives.