According to a study by the independent accountants and business consultants Moore Stephens, there has been marked decline in the number of travel agencies going into insolvency, due to the effects of online trading, in the last five years.
Falling 30% since 2013, which translates to a drop of 47 travel agency closures a year to 33, Moore Stephens cited that “the internet revolution of the last two decades has thinned out the less financially stable businesses, leaving those whose business models are better insulated against the threat of consumers buying DIY holidays.”
Aside from agencies learning how to better respond to the threat of OTAs, the current trend for specialist holidays and experience-driven vacations, whether bespoke luxury trips in far-flung destinations or guided treks across the glaciers of Iceland, has seen British customers require and value the expertise and knowledge of TA’s more than ever before.
As Chris Marsden, the restructuring & insolvency partner at Moore Stephens, pointed out: “Travel agencies are performing better than they have been in recent years. New technology platforms and the evolving expectations of travellers have revolutionised the way the sector works.
“Successful travel operators are those that have moved away from standard package holidays”
Marsden went on to add: “More travellers, especially from the younger generation, increasingly want an ‘experience’ rather than just a holiday – that gives travel agents and tour operators a real opportunity.
“It is harder to piece together those more complex, once-in-a-lifetime holidays from the internet, and that is where travel agents can still compete really well. The successful travel operators are those that have moved away from standard package holidays to more boutique and bespoke products.
“High-quality customer services is one of the keys to success in the market alongside the adoption and effective use of technology. However, travel agencies are also often able to offer better rates and upgrades than those that can be found online, as they are likely to have a relationship with their suppliers which allows them to negotiate prices.
“The market is both challenging and continually evolving, and agencies must fight to stay relevant”
Despite this optimistic outlook Marsden closed his comments with a warning that agencies should not take anything for granted: “The market is both challenging and continually evolving, and agencies must fight to stay relevant against online-only competitors.
“Building customer loyalty by creating a bespoke experience through knowledgeable staff face to face is of paramount importance.”