renegotiation or export knowledge BLACKMAIL?
Hosteltur published two days ago the news about the letters that TUI Travel was referring to the Canary Hotel, where they requested a reduction on prices of contracts from Summer 2009 (http
: / / www.hosteltur.com/noticias/57661_tui-renegocia-precios-este-verano-canarias.html )
The TUI can achieve by this action a margin slightly advantageous in source markets, force the other major tour operators to follow the same example, so expect a chain reaction that affects virtually all contracts for next summer.
are several elements that we must take into account in relation to this:
1 - Contracts for 2009 have already been signed with
prices down in the tour operators threatening to reduce capacity in the Canary Islands take them to other competing destinations.
2 - The capabilities of the two major clusters (TUI and Thomas Cook) to take Canary R
4 seasons being systematically educated to fit fall vacation package sales in most markets (an interesting exception is the Scandinavian markets.)
3 -
commitment levels of the tour operators are at their lowest levels since the "crisis" of the year `89. This lack of commitment is reflected in the total amount of guarantees and deposits on the hiring of accommodation and aircraft seats.
Therefore, it seems clear that the hotel canaries were "requested" worse in relative terms what is already one of the worst contracts in history.
According to that article, TUI's main argument is based on the following options.
"Do nothing and see how the passenger volumes and occupancy of the accommodation falls, and work together to achieve real value of the rental price that customers can afford." not go into semantic analysis and accept that the reference to setting the value of holidays in the Canaries for clients is an error in translation from German or English, not questioning the value for money - hired For three or four months - of our product for next summer. Some considerations
the general subject:
• The concept of renegotiation
must involve a transfer by the two parties agreed on terms and in order to bring positions and maximize the outcome for both parties, given the external circumstances change to the agreement .
• In the event that one party to impose its conditions - based on his power - in a situation in which the results of the other can only get worse can not be characterized as negotiations, but
blackmail.
seems clear that this is what happens in this case, in which the position of the hotel and the destination is weakened by:
==> Difficult access to information. The tour operator which manages the evolution in the demand for different markets, the perception of value by destination customer, the elasticity of the demand, or the margin of maneuver and the possible consequences if the forecasts move further upward or downward, is something that the destination gets the best of cases, so biased and misleading.
==> The tour operator is not acting in any way transparent about its margins, risks, maneuverability, etc. in a particular destination. He hoped that the hotel accepts that his arguments are true without further questioning.
==> The hotel is a starting point the transfer of part of its margin - Not knowing what real impact will have on end customer, or if the reduction in accommodation costs will be passed on prices, margins or additional marketing investment by the issuer. In either case, these actions could not be audited by the destination to be sure that their sacrifice in prices may have had some effect (at the end, and purity, the eventual reduction for renegotiation does not cease to be an "investment "fate in the distribution channel. What less than demand that they be transparent both to the results of it).
hotel's position is therefore very weak, which does not allow a minimal bargaining power.
(TUI only represents 22% of the Canarian tourism market, and this is the English destination in which the proportion of independent travelers is the lowest of all the territory - mainly because of the remoteness and difficulty of continuously profitable Throughout the year liner frequency or low cost).
fragmentation of the target actors are forced to confront this situation independently, with a marginal bargaining power. This is possibly the best weapon of the tour operator, which soon will be intimidating for reluctant, arguing that as a percentage of hoteliers have signed x a reduction of y%.
today share the analysis from the surprise at the complete lack of reaction from the sector with the publication of this notice.
I can not help that cause me outrage, and I worry about the fact that near the end of the first decade of XXI century, will continue to give these pseudo-colonial practices by these groups. I will comment
anecdotally, that in September. 2007, at a conference on Tenerife distribution coincided with representatives of TUI and Thomas Cook, whose main thesis was precisely the invitation to the hotel to further reduce their price levels to be competitive against other destinations in the short and medium radio. My reaction was furious, and argued passionately against the obsolete model of distribution that they represented, and against the practice of requiring payment of hotel bills of the inefficiencies of the tour operators in markets increasingly competitive issuers. I know by former colleagues of the TUI has since been suggested internally to make sure they do not match me in any event or conference.
Today it is clear that not much can be done. But we have no excuse to get to work immediately to improve this position. Some lines of action could be:
• While lodging
contracts must be negotiated and signed individually, some areas in which it is essential to the consolidation of purchasing power - increases each season, renegotiations or capacity commitments by the tour operators - should be delegated to a representative body of associative type.
• The tour operator may request a renegotiation, but you have to put on the table alternatives, and purchase commitments
to change this. The placement and investment returns of the targets should be transparent and auditable.
• If hoteliers agree not significantly alter the sales quota for tour operators, they can not, unilaterally, reduce capacity at the destination. This should be part of their business risks and should not be open to review until next year.
• The industry can not afford
units of this magnitude with actors who are spending their own journey through the desert. The pressure to continue funding their inefficiencies will only grow. • Better promotion
, opening new channels
, expanding the volume of air spaces
, capacity building of marketing and distribution
, a new map of
s sectoral responsibilities among employers, associations and institutions, should be the basis of this new sector strategic plan that we face every day as more necessary and urgent.
us accept as this "renegotiation
" reluctantly, with the objective that will be the last time we have to sit at the table without any option benefit. Toca
go to work today, otherwise, the next time you see this story will touch your head down and think that in this case is our responsibility.