Sector Insight: Travel agents

First Choice: All-inclusive breaks accounted for 40% of holidays sold by TUI
First Choice: All-inclusive breaks accounted for 40% of holidays sold by TUI

Travel agents face challenging times as more consumers turn to the web to research holiday destinations and book their trips.

Sun, sea and sand, adventure or cultural interest - however people prefer to spend their holidays, taking a break has remained the top spending priority for them over the past few years.

No matter how strapped for cash the public is in austerity Britain, an overseas summer holiday or short break continues to be placed ahead of clothes, DIY, savings and paying off debt as items on which it is important to spend money, according to NOP.

While going on holiday continues to play an important part in people's lives, the means by which these holidays are arranged has changed with the advent of the internet. Flights, accommodation and excursions can all be booked from home, resulting in holidays tailor-made for those with the time and inclination to put them together.

Sites such as TripAdvisor, meanwhile, provide a rich vein of user reviews of tourist attractions and hotels that go above and beyond the details available in any guidebook.

This has brought challenging times for travel agents, once the gatekeepers of such information. Of course, not everyone can, or wants to, create their own holiday and the level of service offered by agents still sets them apart.

Events such as last year's Icelandic ash cloud and a series of holiday-company failures have engendered a desire among consumers for a greater level of protection. More recently, this has driven an increase in the share of bookings made through travel agents. Indeed, four in 10 people who booked through a travel agent said they did so to ensure they were protected, according to Ipsos MORI research.

Mintel estimates that 16.7m overseas holidays were booked via travel agents in 2010. This figure was down 24% on 2007, but still equated to 45% of the total number of overseas breaks booked. Independent breaks accounted for almost 63% of holidays, compared with 57% in 2005.

Holidaymakers are most likely to use travel agents for package holidays. They are also seen as a good place to book specialist or complex holiday arrangements, presenting a time-saving method of booking.

Nonetheless, TGI data shows travel agents are being used less for holiday research (down 7.7% between 2005 and 2009), while the internet is on the rise (up 12.3% in the same period).

When it comes to the choice of destination, mid-haul, non-eurozone countries are on the up. This has brought some benefits to travel agents. For example, since 2005, Turkey and Egypt have been the fastest-growing destinations for British tourists (although recent events in the latter may reverse this trend). The fact that both countries are less familiar to many holidaymakers means the majority book these destinations via travel agents as packages.

All-inclusive holidays, too, have gained in popularity as a way to manage and control holiday spending. In 2009, all-inclusive breaks accounted for 40% of the holidays sold by TUI, Europe's biggest tour operator by revenue, through its two main UK brands, Thomson and First Choice. TUI's wide portfolio of brands also includes Simply Travel and Exodus.

The sector is affected by a range of trends, both to its benefit and detriment. Overall, however, the market has suffered; the number of high-street travel agents fell by about a third over the 10 years to 2009.

Last October, Thomas Cook announced a merger of its retail outlets with those of The Co-operative Travel business, creating the UK's biggest network of more than 1300 stores.

As broadband access widens, though, online booking will become an option for more people, including older demographics. Indeed, only about one in five consumers says they might use a travel agent in the future and, while a third of people who have booked via a travel agent were happy with their holidays, only one in five plans to continue to book in this way.

By 2015, Mintel predicts 14.8m overseas holidays will be booked via travel agents, an 11% decline on 2010. This takes their share of the foreign holiday market down to 35%.


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now


Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message