Online travel agent has vowed to create the “very best tool” for agents to sell its product after announcing the creation of a B2B division.
Classic Online will be formed following the £20 million acquisition of luxury tour operator Classic Collection which was announced on Thursday.
The seemingly unlikely tie-up between the leading independent OTA the short-haul beach holiday specialist marks a significant shift in OTB’s model.
Speaking to Travolution sister site Travel Weekly about the deal this week chief executive Simon Cooper said OTB’s evolution to offering Atol-protected packages prompted by EU and UK regulation changes was behind the strategy.
And he said it is hoped that the new Classic Online B2B brand, that will provide a selection of OTB’s good value mainstream beach holidays for travel agent partners, will be up and running in early 2019.
“We will use our capabilities to build the very best tool for agents and also for consumers, if they [agents] want to flip their screen around to encourage people to book, both in terms of usability and breadth and price of product,” he said.
Explaining the rationale behind a deal that he admitted was “not obvious” on the face of it, Cooper said: “There are plenty of instances of online businesses going offline and offline businesses going online.
“While online penetration has grown hugely during the period we have been in business from an insignificant minority to a majority today there’s still a lot of people who feel more comfortable booking through an agent they’ve come to know and trust, and will continue to do so.
“Prior to the latest changes to the Package Travel Directive (PTD) it very much made sense for a business like ours to maintain a clean [B2C] model rather than a hybrid model because we did not sell packages, and did a very good job of not selling packages.
“But we have known for five years that the new PTD was coming in and for two to three of those years we have had a fixed date for its implementation.
“Over that period of time the On The Beach model has been evolving, not least in terms of the size and scale we have, as we built our own portfolio of more-exclusive higher-quality beach holiday product and we became more package-ready.
“If I put myself in the shoes of the travel agent. They want to access the stuff their consumers are wandering in and asking for. It won’t be all the boutique five star, but it also won’t be the lower end two star.”
Asked whether OTB could face push back from traditional agents that have seen the online agent as a competitor, Cooper said he expects the B2B-only status of Classic Online will encourage them to do business with the division.
“If I’m a travel agent today and I flip my screen around to show the customer a holiday from another provider I know they can go on their phone and look at what prices they are offering in their B2C channel. One of the benefits of being agent-only is it will not be accessible to the general public.”