Guest Post: OTA's are filling the void left by Teletext's deal with Truly

By Travolution
By Travolution
December 13, 2013 11:15 AM GMT

Teletext's move to a single partner will prompt a significant shift in a certain segment of the industry, but it's not a killer blow for Qwerty Travel, writes director Matt Somers

The dust is settling after Teletext’s out-of-the-blue decision to drop 14 out of the 15 agencies advertising on its site and work exclusively with Truly Travel. A number of us ex-Teletext partners are scrambling around looking to fill the void that is left.

It’s estimated that these 14 represented about £200 million in revenue. On our small slice we were running at a margin of 16%, so if that was the norm we are looking at something like £32 million in total gross margin that has fallen out of the market.

Fundamental change

Clearly you can’t take this volume of sales out of such a small sector of the industry without something fundamentally shifting.

These were labour-intensive holiday bookings and I estimate that between 400 and 500 people would have been employed across the 14 firms to sell to and service these clients.

We have seen one recent casualty, Ola Holidays, and while its demise was too early for it to have been a direct result of losing Teletext, I’m sure that it would have been a deciding factor for any third-party considering a rescue bid for the business.

Following discussions with both the Travel Trust Association and the Civil Aviation Authority, Qwerty Travel agreed to take over all forward bookings to make sure clients can continue their holiday plans. This is the first time this has been done since the new Flight-Plus legislation came into effect.

As for Teletext Holidays and its future, the historical credibility of the business as a means to compare prices simply and effectively by consumers will soon be eroded, which is a shame as it was one of the pioneers of this model.

Teletext will see shift

Early signs suggest that with its new sole partner, Teletext Holidays no longer has the same breadth of product.

As the general public becomes aware that the value of Teletext Holidays as an aggregator or price-comparison site is no longer there, the powers that be at Teletext will very quickly see a shift in their business model.

After all, as a consumer, given the choice of seeing a broad spectrum of products from a number of online travel aggregators, or a narrower and less‑effective and less value‑orientated range, where would you choose to spend your hard-earned cash? Even the most ardent of Teletext fans will start to look elsewhere in time as, in this economy, price rules.

So what next for Qwerty Travel? Well, we were fortunate as we were already working with all the main holiday deals and price‑comparison sites in our sector, and they have been supportive in looking at ways of driving more business our way.

I’ve had some great meetings with existing and potential partners discussing plans for 2014 and beyond.

While the shape of our business will have to change, I’m confident that the Teletext Holidays blow wasn’t a killer punch to our business. It was a cunning left hook that took us by surprise but we are fighting back with all our efforts.

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