Simon Calder: Middle men are best in moderation

The man who pays his way

Cutting in the middle man (or woman) always used to be the essential strategy for long-haul flying. It was as though airline executives thought, "Let's see who's wealthy enough or foolish enough to buy at our published prices, and then we'll discount the rest like mad – but only through agents."

To find a sensible fare you had to buy through specialist firms such as DialAFlight, Trailfinders or Travelbag, who routinely undercut prices charged direct by the airlines. Their edge has steadily eroded, and most carriers now sell direct to the public at the same fares as, or sometimes less than, the agents can charge.

Going through a middle man can still work a treat. Agents often have access to "IT fares" that the airlines supply in an under-the-counter fashion, for sale at low prices only if bundled with accommodation as an "inclusive tour". These are especially useful to evade the ridiculous fares that many airlines still charge for short trips to the US which don't include a Saturday night stay. Suppose you want to go to New York on Monday for three nights: even though Manhattan has some of the priciest hotels on the planet, booking a BA flight plus the Holiday Inn in a single transaction saves over £600 on the air fare alone.

This month, I thought £760 return to the west coast of the US, as offered by Icelandair, was an excellent fare. But it turned out to be £18 cheaper through the agent I ultimately bought the ticket through. And for anything more complicated than a simple there-and-back journey it is worth going through an agent, even if the cost is a few pounds more. You get professional guidance through the travel minefield, with advice on everything from passport validity to money-saving dodges.

Stelios Haji-Ioannou cut out the middle man in spectacular fashion when he founded easyJet in 1995: "I had no allegiances, I had no friends in that industry. I just said, 'This doesn't make sense, we will not do it'," he told me. The no-frills airline even considered a cartoon depicting Stelios driving a stake through the heart of a travel agent, with the slogan "At easyJet, we know how to deal with bloodsuckers". Today, the airline works cheerfully with the traditional travel trade.

Last weekend, however, the perils of the middle man were revealed to thousands of prospective guests at hotels across the world. At around the time I was boarding my flight home from Seattle, thousands of customers of Clever-hotels.com were being told that booking through the website had turned out not to be such a brilliant idea. The firm that owned the accommodation site, called Navelar, had gone bust, and many supposedly confirmed reservations had been cancelled. Customers had paid in good faith, but the money had not been passed on, and the bookings were void.

Most of the British travellers affected by the failure will ultimately get their money back through the financial provider whose cards they used. But finding, and funding, alternative rooms at short notice is proving costly and stressful for many travellers.

The collapse revealed the labyrinth of complexity that can stand between the weary traveller and a good night's sleep. Often, there is not merely a single middle man, but a tangle of interested parties taking slices of the action .

Angle on the tangle

Many of the victims of the Clever-hotels.com collapse had found the firm through the price-comparison site, Trivago. "We don't take any money from consumers," insists the firm, but it gets paid for each lead. Suppose a search on Trivago led you to Clever-hotels.com; you might imagine that the latter had deals with individual hotels, enabling it to offer the "best possible price" that it promised prior to checking out of the commercial world. Nothing of the sort: it sourced the rooms through various wholesalers, such as Hotelbeds.com. These intermediaries take a cut, of course. By the time the Chancellor (in the case of UK bookings) has helped himself to 20 per cent VAT, precious little remains for the hotelier.

The principle of bulk-buying – where the more you order, the lower the price – works well for baked beans. But for hotels, particularly individual, family-run properties, the extent of margins that are extracted before the guest reaches the reception desk are alarming.

I use search engines to get an idea of price levels, but I always then contact the hotel direct to see what it is offering; with the exception of one property (in Norwich, oddly), the quote has never been more than the many sites promising "the lowest prices" and has often proved less.

Worldwide webs

Many of our top travel companies are foreign, and we benefit from the most competitive travel industry in the world partly because of the UK's openness to overseas enterprises. Kuoni, the long-haul specialist, is Swiss – as are the owners of Monarch. BA's holding company is based in Madrid. And UK travellers have access to a web of worldwide offerings. But before you buy online through a company found via a price-comparison site, find out where it is based. Then form a judgement about the value the firm adds.

Clever-hotels.com was located in Hamburg, which does convince me of its expertise in helping UK guests find British hotels. While there is no suggestion that any other provider is in financial trouble, I won't consult Prestigia.com until I next visit the fine city of Casablanca, where it is based. And I shall leave Olotels.com slumbering undisturbed in its home city, Hong Kong.

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