TRAVEL

Smart marketing for cut-price trips

A food-store chain's foray into the holiday package business has travel agents up in arms

Warren Gerard April 6 1981
TRAVEL

Smart marketing for cut-price trips

A food-store chain's foray into the holiday package business has travel agents up in arms

Warren Gerard April 6 1981

Smart marketing for cut-price trips

A food-store chain's foray into the holiday package business has travel agents up in arms

TRAVEL

Warren Gerard

That trip to the Dominion store may not be maiply because of the meat. The incentive could be lossleader prices on holiday packages. Dominion’s entry into the travel trade early this year through its wholly owned subsidiary, Select Travel of Toronto, has created a furore among travel agents. Angered by competition from a food-store chain, they are hiring lawyers and pressuring government to stop the discounting.

The source of the commotion is smart marketing: colorful displays invite the customer to read a brochure, call a tollfree number, make a booking with Select’s Toronto office and save 10 per cent over a travel agent’s price for a package tour to any destination. Volume business is the strategy. John Mols, vice-president and general manager of Select, is now placing permanent displays in Ontario’s 160 Dominion stores; by summer he plans to have reached all the chain’s outlets, numbering more than 300 from Newfoundland to Manitoba. “If I hadn’t done it, someone else would,” says Mols, who has eight years’ experience in the travel business. “I’m tapping the most important market. So far the response has been overwhelming.”

Travel industry spokesmen worry that unless Select can be stopped, outlets for discounted travel will catch on across Canada, driving many agents out of business. “If Dominion is successful, there’s no doubt that someone else will try it,” says Isobel Whiteside, president of the Alliance of Canadian Travel Associations (ACTA), who operates two travel agencies in Calgary.

Though many travel agents have been offering, vacationers occasional perks (price cuts, free luggage, free scuba and tennis lessons), they feel threatened by Select’s year-round discounting. The recently formed Agents Action Group is challenging Select’s right to discount wholesalers’ advertised prices (wholesalers or tour operators set the prices; retailers or travel agents sell the packages). According to spokesman Robert Auld, continued discounting will force 200 of Ontario’s 1,800 travel agencies out of business.

Agents have so far won concessions that amount to a cosmetic victory. In January, when Select kiosks displaying travel brochures appeared in 60 Ontario

Dominion stores, ACTA-Ontario complained to the department of consumer and commercial relations that Dominion was misleading the public by masquerading as a travel agent. In fact, the chain was simply referring customers to Select. A registered travel agent, Select made the bookings by phone and delivered tickets to the store (a service that invited customers to do more shopping). In a compromise move, Select agreed to mail tickets, tone down Dominion’s role in the advertising and re-

place the kiosks with shelf displays.

But while budget-conscious shoppers continue to phone Select for savings, Auld’s group has asked the federal air transport committee (ATC) for a ruling on whether discounting violates air carrier regulations. The ATC is investigating. However, a ruling that discounting violates the regulations could hurt the complainants themselves: many travel agencies that offer occasional discounts would also have to stop.

Meanwhile, the travel agents have been arguing that Select can’t counsel travellers. “In the end the consumer will be unhappy without any counselling,” says Whiteside. But Mols insists that his employees do counsel, not that their advice is needed. “Any idiot can read a brochure. If you can read and write you should be able to save yourself 10 per cent.”

Most tour operators are dealing with Select, although Wardair, the charter airline, which often deals directly with the public, is boycotting the discounters. The holdouts are few and a small number of travel agents are viewing Select’s way of doing business as a gimmick that could eventually be turned to their own advantage. “We have to face reality,” says Ben Nierop, a Toronto travel agent with 30 years’ experience. “If Dominion-Select can do it, surely a large co-operative of travel agents, with outlets all over, can do the same thing, over the counter with good guidance.”

No matter what, it looks as if the traveller will be the winner.