Hays Travel has told its homeworkers they are giving too much of their profit away to customers by discounting more than necessary.
More than half of the company’s 647 homeworkers are giving away more than the average Hays discount.
Hays homeworkers include Personal Travel Consultants and Explorer Travel franchisees.
Head of PTC Tanya Cooper told homeworkers attending Hays overseas conference, being held in Belek, Turkey, that after a challenging July and August for bookings, they had seen a ‘strong bounce back’ in September and October.
However, she warned that discounts have impacted homeworkers profitability and, somewhat counter-intuitively, they are discounting more for repeat customers than first-time bookers.
“If customers are coming back to you for your service, why are you discounting?” she asked.
Giving an example of two different homeworkers, Tanya demonstrated how one had made more profit on a lower total transaction value by offering only a small discount while the other gave away almost 10 times more. She said the agent who made the most profit had a better mix of long-haul and cruise product than the other.
Tanya challenged homeworkers to increase their margins slightly this year by switching their focus to long-haul holidays, by attracting a higher percentage of new customers, and by promoting their customer service.
Earlier, Hays Chair and owner Dame Irene Hays had told the conference: “I know the people in this room give extraordinary service…and I cannot for the life of me understand why you give away the discounts you do. You need to value the service you offer.”
Head of Hays Independence Group Harriet Thompson said its members had seen a dip in margins due to higher discounts this year, with the deepest discounts being offered on short-haul sales. She urged business owners to combat discounting by using suppliers offering higher commissions, promoting cruise and long-haul in their marketing, and selling add-ons such as airport parking and hotels and Universal tickets.
