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Travel Agents - UK - December 2012

“The high street travel agent industry has been buoyed by the misconception that they offer a greater level of consumer protection than online channels, with consumers confusing ABTA membership with ATOL certification. With this myth dispelled, the decline in usage of high street travel agents will likely be accelerated as consumers let price rather than misconception guide their booking process.”

– Harry Segal, Travel and Tourism Analyst


Some questions answered in this report include:

  • How will improved consumer awareness about protection affect agents?
  • How will VisitEngland’s proposed 2013 campaign affect agents?
  • How can agents compete against price comparison websites?
  • How can agents attract the lucrative senior demographic?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Estimated number of overseas holidays booked via travel agents, 2007-17
              • Figure 2: Estimated number of domestic holidays booked via travel agents, 2007-17
            • Market factors
              • Weak pound weighs down overseas sector
                • Figure 3: Index of quarterly average exchange rates for Sterling, Q1 2007-Q3 2012
              • Tourist expenditure abroad posts signs of recovery
                • Figure 4: Seasonally adjusted UK tourist expenditure abroad vs. total household final consumption expenditure, Q2 2002-Q2 2012
              • Higher spending abroad mitigates impact of decline in overseas holidays
                • Inclusive holidays sustain the exotic, long-haul sector
                  • Figure 5: Index of overseas holidays, by region, 2007-11
                • Domestic holiday market experiences shaky growth
                  • Market share
                    • Figure 6: Leading travel agents, by number of retail outlets*, October 2012
                  • The consumer
                    • One in four has booked a holiday using a travel agent
                      • Figure 7: Use of travel agents in past two years, October 2012
                    • Time saving and protection drop, but stay on top
                      • Figure 8: Reasons for travel agent use, October 2012
                    • Positive views of travel agents have fallen
                      • Figure 9: Attitudes towards travel agents, October 2012
                    • Misconceptions about protection fuel travel agent sales
                      • Increased awareness about ATOL could be a double-edged sword
                        • What we think
                        • Issues in the Market

                            • How will improved consumer awareness about protection affect agents?
                              • How will VisitEngland’s proposed 2013 campaign affect agents?
                                • How can agents compete against price comparison websites?
                                  • How can agents attract the lucrative senior demographic?
                                  • Trend Application

                                      • Premiumization and Indulgence
                                        • Guiding Choice
                                          • 2015: Old Gold
                                          • Market Drivers

                                            • Key points
                                              • Industry calls for Flight Plus ATOL extension to airlines
                                                • ATOL extension to be widely advertised in £250,000 online campaign
                                                  • Tensions rise as PTD reform deadline draws closer
                                                    • Flight Plus to accelerate ABTA membership decline
                                                      • Figure 10: ABTA membership, March 2011-March 2012
                                                      • Figure 11: ABTA new membership, July 2011-September 2012
                                                    • Operator failures continue, but decline in number year-on-year
                                                      • Figure 12: ATOL tour operator failures/closures in the UK, October 2011-September 2012
                                                    • Weak pound weighs down overseas sector
                                                      • Figure 13: Index of quarterly average exchange rates for Sterling, Q1 2007-Q3 2012
                                                    • Travel agents remain an key a source of research, despite internet threat
                                                      • Figure 14: Research sources used for holidays/short breaks in the last 12 months, 2010-12
                                                      • Figure 15: Research sources used for holidays/short breaks in the last 12 months, 2010-12
                                                    • Tourist expenditure abroad posts signs of recovery
                                                      • Figure 16: Seasonally adjusted UK tourist expenditure abroad vs. total household final consumption expenditure, Q2 2002-Q2 2012
                                                      • Figure 17: Seasonally adjusted UK tourist expenditure abroad vs. total household final consumption expenditure, 2008-12
                                                    • Higher spending abroad mitigates impact of decline in overseas holidays
                                                      • Figure 18: Overseas holiday volume and value, 2007-11
                                                    • Inclusive holidays sustain the exotic, long-haul sector
                                                      • Figure 19: Overseas holidays, by region, 2007-11
                                                      • Figure 20: Index of overseas holidays, by region, 2007-11
                                                    • Domestic holiday market experiences shaky growth
                                                      • Figure 21: Domestic holidays in Great Britain, volume and value, 2007-11
                                                    • Travel agents fail to take a slice of the domestic market
                                                      • Figure 22: Domestic holidays in Great Britain, by method booked, 2011
                                                  • Who's Innovating?

                                                    • Key points
                                                      • Companies seek to profit from increasing smartphone penetration
                                                        • Industry looks to emulate social networking models to promote sharing
                                                          • Thomson to launch ‘shop of the future’
                                                            • Virgin chases after post-Olympics goodwill
                                                              • Thomas Cook moves to educate agents on differentiated products
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • Travel agent market down 13% over five-year period
                                                                    • Figure 23: Estimated number of holidays booked via travel agents, 2007-17
                                                                    • Figure 24: Estimated number of holidays booked via travel agents, 2007-17
                                                                  • Personal visits to travel agents continue to fall
                                                                    • Figure 25: Channel used to book holidays/short breaks in the last 12 months, 2010-12
                                                                    • Figure 26: Channel used to book holidays/short breaks in the last 12 months, 2010-12
                                                                  • Forecast methodology
                                                                    • Fan chart explanation
                                                                    • Segment Performance

                                                                      • Key points
                                                                        • Decline in overseas segment set to continue
                                                                          • Figure 27: Estimated number of overseas holidays booked via travel agents, 2007-17
                                                                          • Figure 28: Estimated number of overseas holidays booked via travel agents, 2007-17
                                                                        • Stronger domestic performance offers limited respite from overall decline
                                                                          • Figure 29: Estimated number of domestic holidays booked via travel agents, 2007-17
                                                                          • Figure 30: Estimated number of domestic holidays booked via travel agents, 2007-17
                                                                      • Market Share

                                                                        • Key points
                                                                          • Market dominated by post-merger Thomas Cook
                                                                            • Figure 31: Leading travel agents, by number of retail outlets*, October 2012
                                                                          • Thomas Cook slashes store portfolio but retains leading position
                                                                            • Advantage consortium expands through partnerships and acquisitions
                                                                              • Some firms pursue passive growth…
                                                                                • …while others aim for more aggressive expansion
                                                                                • Companies and Products

                                                                                  • Thomas Cook Group Plc
                                                                                    • Background
                                                                                      • Financial performance
                                                                                        • Figure 32: Financial performance of Thomas Cook Group Plc, 2010-11
                                                                                        • Figure 33: Financial performance of Thomas Cook Retail Limited, 2010-11
                                                                                      • Recent activity
                                                                                        • TUI Travel Plc
                                                                                          • Background
                                                                                            • Financial performance
                                                                                              • Figure 34: Financial performance of TUI Travel Plc, 2010-11
                                                                                            • Recent activity
                                                                                              • Advantage Travel Centres Limited
                                                                                                • Background
                                                                                                  • Financial performance
                                                                                                    • Figure 35: Financial performance of Advantage Travel Centres Limited, 2010-11
                                                                                                  • Recent activity
                                                                                                    • The Travel Network Group (Worldchoice UK Limited)
                                                                                                      • Background
                                                                                                        • Financial performance
                                                                                                          • Figure 36: Financial performance of Worldchoice Travel Limited, 2010-11
                                                                                                          • Figure 37: Financial performance of Worldchoice UK Limited, 2010-11
                                                                                                          • Figure 38: Financial performance of TTA (2007) Limited, 2010-11
                                                                                                        • Stella Travel Services UK (The Global Travel Group Limited)
                                                                                                          • Background
                                                                                                            • Financial performance
                                                                                                              • Figure 39: Financial performance of STS UK Holdco II Limited, 2010-11
                                                                                                              • Figure 40: Financial performance of Stella Global UK Limited, 2010-11
                                                                                                              • Figure 41: Financial performance of The Global Travel Group Limited, 2010-11
                                                                                                            • Recent activity
                                                                                                              • Flight Centre (UK) Limited
                                                                                                                • Background
                                                                                                                  • Financial performance
                                                                                                                    • Figure 42: Financial performance of Flight Centre (UK) Limited
                                                                                                                  • Hays Travel Limited
                                                                                                                    • Background
                                                                                                                      • Financial performance
                                                                                                                        • Figure 43: Financial performance of Hays Travel Limited, 2010-11
                                                                                                                      • Recent activity
                                                                                                                        • STA Travel Limited
                                                                                                                          • Background
                                                                                                                            • Financial performance
                                                                                                                              • Figure 44: Financial performance of STA Travel Limited, 2010-11
                                                                                                                            • Travel Counsellors Limited
                                                                                                                              • Background
                                                                                                                                • Financial performance
                                                                                                                                  • Figure 45: Financial performance of Travel Counsellors Limited, 2010-11
                                                                                                                                • Recent activity
                                                                                                                                  • Virgin Holidays Limited
                                                                                                                                    • Background
                                                                                                                                      • Financial performance
                                                                                                                                        • Figure 46: Financial performance of Virgin Holidays Limited, 2011-12
                                                                                                                                      • Recent activity
                                                                                                                                      • Brand Research

                                                                                                                                        • Brand map
                                                                                                                                            • Figure 47: Attitudes towards and usage of brands in the travel agent sector, September 2012
                                                                                                                                          • Correspondence analysis
                                                                                                                                            • Brand attitudes
                                                                                                                                              • Figure 48: Attitudes by travel agent brand, September 2012
                                                                                                                                            • Brand personality
                                                                                                                                              • Figure 49: Travel agent brand personality – macro image, September 2012
                                                                                                                                              • Figure 50: Travel agent brand personality – micro image, September 2012
                                                                                                                                            • Brand experience
                                                                                                                                              • Figure 51: Travel agent brand usage, September 2012
                                                                                                                                              • Figure 52: Satisfaction with various travel agent brands, September 2012
                                                                                                                                              • Figure 53: Consideration of travel agent brands, September 2012
                                                                                                                                              • Figure 54: Consumer perceptions of current travel agent brand performance, September 2012
                                                                                                                                              • Figure 55: Travel agent brand recommendation – Net Promoter Score, September 2012
                                                                                                                                            • Brand index
                                                                                                                                              • Figure 56: Travel agent brand index, September 2012
                                                                                                                                              • Figure 57: Travel agent brand index vs. recommendation, September 2012
                                                                                                                                            • Target group analysis
                                                                                                                                              • Figure 58: Target groups, September 2012
                                                                                                                                              • Figure 59: Travel agent brand usage, by target groups, September 2012
                                                                                                                                            • Group One – Conformists
                                                                                                                                              • Group Two – Simply the best
                                                                                                                                                • Group Three – Shelf stalkers
                                                                                                                                                  • Group Four – Habitual shoppers
                                                                                                                                                    • Group Five – Individualists
                                                                                                                                                    • Travel Agent Use

                                                                                                                                                      • Key points
                                                                                                                                                        • One in four has booked a holiday using a travel agent
                                                                                                                                                          • Figure 60: Use of travel agents in past two years, October 2012
                                                                                                                                                        • Usage down against 2010 peak
                                                                                                                                                          • Almost one in ten still visits an agent for non-booking use…
                                                                                                                                                            • … but many are wary of pushy sales personnel
                                                                                                                                                              • Usage lowest among financially significant 55-64 demographic
                                                                                                                                                                • Figure 61: Travel agent use, by demographics, October 2012
                                                                                                                                                                • Figure 62: UK resident’s holidays abroad, Apr-Jun 2012
                                                                                                                                                              • ABs offer largest unexploited resource
                                                                                                                                                                • Figure 63: Travel agent use, by socio-economic group, October 2012
                                                                                                                                                              • Presence of young children dampens usage
                                                                                                                                                                • Figure 64: Travel agent use, by presence of children, October 2012
                                                                                                                                                            • Reasons for Travel Agent Use

                                                                                                                                                              • Key points
                                                                                                                                                                • Time saving and protection drop, but stay on top
                                                                                                                                                                  • Figure 65: Reasons for travel agent use, October 2012
                                                                                                                                                                • Desire for protection highest among middle aged
                                                                                                                                                                  • Figure 66: Reasons for travel agent use, by age, October 2012
                                                                                                                                                                • Motivation to save money decreases by lifestage
                                                                                                                                                                  • Figure 67: Reasons for travel agent use, by lifestage, October 2012
                                                                                                                                                                • A third of ABs are satisfied and would book again
                                                                                                                                                                  • Figure 68: Reasons for travel agent use, by socio-economic group, October 2012
                                                                                                                                                                • Long-haul travellers seek value and expertise
                                                                                                                                                                  • Figure 69: Reasons for travel agent use, by use of travel agents in past two years, any booking and package bookings, October 2012
                                                                                                                                                                • Flight-only holidaymakers use agents to save time
                                                                                                                                                                  • Figure 70: Reasons for travel agent use, by use of travel agents in past two years, non-package/non-booking use, October 2012
                                                                                                                                                              • Attitudes Towards Travel Agents

                                                                                                                                                                • Key points
                                                                                                                                                                  • Positive views of travel agents have fallen
                                                                                                                                                                    • Figure 71: Attitudes towards travel agents, October 2012
                                                                                                                                                                  • Over 65s most likely to view agents as most convenient option
                                                                                                                                                                    • Figure 72: Selected attitudes towards travel agents, by age group, October 2012
                                                                                                                                                                  • Misconceptions about protection fuel travel agent sales
                                                                                                                                                                    • Figure 73: Attitudes towards travel agents, by reasons for travel agent use, October 2012
                                                                                                                                                                  • Increased awareness about ATOL could be a double-edged sword
                                                                                                                                                                  • Appendix – Market Drivers

                                                                                                                                                                      • Figure 74: Research sources used for holidays/short breaks in the last 12 months, 2010-12
                                                                                                                                                                      • Figure 75: Research sources used for holidays/short breaks in the last 12 months, 2010-12
                                                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                                                      • Figure 76: Channel used to book holidays/short breaks in the last 12 months, 2010-12
                                                                                                                                                                      • Figure 77: Channel used to book holidays/short breaks in the last 12 months, 2010-12
                                                                                                                                                                      • Figure 78: Channel used to book holidays/short breaks in the last 12 months, 2010-12
                                                                                                                                                                      • Figure 79: Channel used to book holidays/short breaks in the last 12 months, 2010-12
                                                                                                                                                                      • Figure 80: Estimated number of holidays booked via travel agents, 2007-17
                                                                                                                                                                      • Figure 81: Estimated number of overseas holidays booked via travel agents, 2007-17
                                                                                                                                                                      • Figure 82: Estimated number of domestic holidays booked via travel agents, 2007-17
                                                                                                                                                                  • Appendix – Brand Research

                                                                                                                                                                      • Figure 83: Brand usage, September 2012
                                                                                                                                                                      • Figure 84: Brand commitment, September 2012
                                                                                                                                                                      • Figure 85: Brand momentum, September 2012
                                                                                                                                                                      • Figure 86: Brand diversity, September 2012
                                                                                                                                                                      • Figure 87: Brand satisfaction, September 2012
                                                                                                                                                                      • Figure 88: Brand recommendation, September 2012
                                                                                                                                                                      • Figure 89: Brand attitude, September 2012
                                                                                                                                                                      • Figure 90: Brand image – Macro image, September 2012
                                                                                                                                                                      • Figure 91: Brand image – Micro image, September 2012
                                                                                                                                                                      • Figure 92: Profile of target groups, by demographics, September 2012
                                                                                                                                                                      • Figure 93: Psychographic segmentation by target groups, September 2012
                                                                                                                                                                      • Figure 94: Brand usage, by target groups, September 2012
                                                                                                                                                                    • Brand index
                                                                                                                                                                      • Figure 95: Brand index, September 2012
                                                                                                                                                                  • Appendix – Travel Agent Use

                                                                                                                                                                      • Figure 96: Most popular travel agent use, by demographics, October 2012
                                                                                                                                                                      • Figure 97: Next most popular travel agent use, by demographics, October 2012
                                                                                                                                                                      • Figure 98: Other travel agent use, by demographics, October 2012
                                                                                                                                                                  • Appendix – Reasons for Travel Agent Use

                                                                                                                                                                      • Figure 99: Reasons for travel agent use, by demographics, October 2012
                                                                                                                                                                  • Appendix – Attitudes towards Travel Agents

                                                                                                                                                                      • Figure 100: Most popular attitudes towards travel agents, by demographics, October 2012
                                                                                                                                                                      • Figure 101: Next most popular attitudes towards travel agents, by demographics, October 2012

                                                                                                                                                                  Companies Covered

                                                                                                                                                                  • Advantage Business Travel Management
                                                                                                                                                                  • Bales Worldwide
                                                                                                                                                                  • Business Travel Direct
                                                                                                                                                                  • Debenhams (UK and Republic of Ireland)
                                                                                                                                                                  • First Choice Holidays & Flights Ltd
                                                                                                                                                                  • Flight Centre (UK) Ltd
                                                                                                                                                                  • Global Travel Group Plc
                                                                                                                                                                  • Hays Travel Ltd
                                                                                                                                                                  • Holidaysplease Limited
                                                                                                                                                                  • House of Fraser Plc
                                                                                                                                                                  • STA Travel
                                                                                                                                                                  • Tesco Plc
                                                                                                                                                                  • Thomas Cook Group PLC
                                                                                                                                                                  • TUI Travel PLC
                                                                                                                                                                  • Virgin Atlantic Airways Limited
                                                                                                                                                                  • Virgin Group Ltd.
                                                                                                                                                                  • Virgin Holidays
                                                                                                                                                                  • Worldchoice Travel

                                                                                                                                                                  Travel Agents - UK - December 2012

                                                                                                                                                                  £1,995.00 (Excl.Tax)