June 2011 Archives

In our article about Club Med's controversial Groupon offer - an effort, according to the all-inclusive operator, to fill certain poor-selling resorts - Travel Designers MD Nick McKay says:

This is a deal agents don't have access to and we can't compete on it. Club Med has a group of really good agents, so why don't they work with us to push these resorts?

I can't argue with Nick's fundamental point, which is that if Med has distressed or close-to-distressed inventory, loyal agents could have helped them shift it.

But it's a general point, and in terms of this specific deal it's worth looking closer at why it wasn't available to agents. Two points matter:

• First, Groupon deals are available for 24 hours only. (Buyers then had 36 hours to book with Club Med.)
• Second, the deals are void unless a given number of vouchers are sold.

It's the second point - the minimum purchase threshold, examined at greater length in this Wikinomics post - that really matters.

As a supplier you can do your sums, figure out how much you'd need to sell to make a given deal pay off, factor in Groupon's cut (usually around 50% of voucher sales), and walk away without suffering a big loss if the target isn't met.

So the reason agents don't have access to the deal is that pushing it through the agency channel - as something like '£230 off for the next 24 hours' - entails greater risk. If Club Med doesn't get the volume required to make the deal commercially viable, where's the safety net?

Bear in mind too that Groupon has a big, big email database and a solid pass-along mechanism (you start to see what you're paying that 50% cut for). Can the agency channel shift this much struggling stock this fast, and do it with as little risk?

At this point you might be asking why, if Groupon is already delivering enough volume to make the offer viable, Med couldn't just throw it out to agents too. Possibly - but exclusivity clauses in the Groupon contract would make doing so very complicated (see Rakesh Agrawal's analysis of a Groupon merchant agreement on Business Insider).

To return to Nick, though, it remains absolutely fair to ask why Med wasn't going to agents with other strategic offers before running a 24-hour flash sale. The firm's agency sales manager Stuart De Bourgogne told us he'd try to "find a solution" with top-selling agencies in future.

Time will tell how big and how permanent a part of the marketing mix Groupon and its ilk will become. If it's any consolation, research by one business school found 40% of merchants said 'never again' after using Groupon. The company disputes the findings.

After yesterday's pat on the back to Cox & Kings, another post prompted by Twitter. @rowangoldthorp fired a three-part question to our @travelweekly news feed this afternoon:

We haven't been challenged on this before, I don't think. First of all I should point out that SeaWorld hasn't been "dropped by many operators" - it's still widely sold by companies that do US parks.

Regarding the questions about Travel Weekly, here are a few first thoughts:

• A key issue for us would be who we look to as an authority on an institution's standards. Born Free comes from the position that all zoos should be phased out, and says little about SeaWorld's rescue, rehabilitation and conservation work or its support of marine research. If anyone has a good list of authorities on the subject, leave a comment or email me. 
  
  
• Generally we don't go through the archives of welfare organisations when putting together or reviewing features that reference animal attractions. We rely instead on personal experience of them and on their reputation in the market. I'll talk to the team about whether we can realistically do more thorough checks, or whether we're more likely to address those issues after publication on a case-by-case basis, through readers' comments, tweets etc.
  
  
• We cover and are positive about sustainability initiatives, but have to balance those issues with our support for a healthy travel industry. As is the case on every publication, views and areas of interest differ from writer to writer - if you check Ian Taylor's blog you'll find him writing about sustainability quite a lot. See also the sustainability diary that Tui's Ian Chapman wrote for us earlier this year.
  
  
• It's worth adding that we cover sustainability despite traffic data telling us there is not vast appetite for it from our readership. Anecdotally, readers tell us that they'd be more interested in those issues if their clients exhibited more of an interest in them. The question of who has power over where the market goes is, as ever, a complex one.

Yesterday I replied to a tweet by Travellerspoint.com co-founder @samdaams flagging up some spammy forum posts that appeared to come from Cox & Kings. A few follow-ups ensued after travel writer @matthewteller brought it to the company's attention.

Not a great situation for the venerable brand to be in - especially given three of the four Twitter users being cc'd were journalists.

So credit where it's due to Cox & Kings UK, first of all for the immediate response (read from bottom up):

...and secondly for following up with me on email, unprompted. I've just had the following update:

The spamming ... unfortunately originated from the social media agency used by Cox & Kings India, which is a completely separate branch to Cox & Kings UK. They had been given strict guidelines by Cox & Kings India not to use spam tactics such as these and it seems that this was a one-off mistake as they have been working with the agency without incident for over 9 months.
 
We are very aware how frustrating comments such as these are for blog/website owners so we take this very seriously. We have been assured by Cox & Kings India that the incident has been dealt with and will not happen again.

It remains a bit shocking that this activity came from an agency specialising in social media at all, even as a one-off. Cox & Kings India's agency is WATConsult, who also count Procter & Gamble and Warner Bros among their clients. Given their confident handling of this, maybe Cox & Kings UK's in-house comms team should be offered the job instead.

(Another option: pre-empt it all by following Trailfinders' example - boss Tony Russell, whose total rejection of social media caused a few raised eyebrows last week, explains his company's position to our head of news Lee Hayhurst over in the news pages.)