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Mark-up mechanics or market dynamics?


When I took a taxi from Genoa airport into the city last week, the taxi driver quickly ascertained I had no idea where I was going and how much it should cost, and quoted me €30 for a trip I later learned should cost €20.


It was a classic mark-up situation: the supplier realised I could and would pay more than the going rate, and I felt he was giving me a fair enough price. He was also so friendly and chatty that I thoroughly enjoyed my over-priced ride.


The concept of marking up was the subject of a controversial documentary aired on Channel 4 this week, which sought to expose Flight Centre for marking up flights for an elderly woman far more than they did for a younger man, supposedly because she was less web-savvy, and therefore easier to extract money from.


As usual, the consumer media hasn’t necessarily appreciated how the travel industry really works.


The elderly lady was quoted a higher price, but it was in a different store, with a different local market, and by a different consultant, working to different targets. So to imply that the higher price was quoted just because she is old is rather a stretch – the mark-up in this store might have been just as high for the younger man.


What is or is not a reasonable mark-up to add, in exchange for a consultant’s time and expertise, is a matter for debate. But the fact Flight Centre enjoys such strong repeat business suggests its customers are comfortable with this particular trade-off.


Other practices exposed in the documentary – such as holding seats to force up fares – are certainly murky, but they are not company policy, and I’ve no doubt Flight Centre will crack down following this embarrassing expose.


I was frustrated to see the Mail Online pick up a line from Channel 4’s press release which stated that “seventeen million flights were booked through travel agents last year”, which seemed to conflate the way Flight Centre runs its business with that of all travel agents in the country.


It’s not the consumer media’s responsibility to promote travel agents, though we can at least expect them to be fair. But, with TTG having revealed what we believe to be the best agencies in the country this week, in our first-ever Top 50 ceremony, we will certainly be helping our winners spread a more positive message about the service and value that a good agent can offer.


Pippa Jacks
Editor, TTG


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