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Travel Agents - UK - December 2014

“The casual, non-committal browsing environment offered by concept stores should prove appealing to consumers, but in-store sales conversion rates will likely take a hit. However, for larger brands this could be offset somewhat by a realigned focus on selling higher-margin, differentiated products, or by working to boost the sale of ancillary products such as travel insurance or foreign currency.”
– Harry Segal, Technology & Travel Analyst

This report answers the following questions:

  • Can the rollout of new concept stores save the high street?
  • How can agents cater to a better-informed customer?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Decline in the number of holidays booked in-store is set to continue
                • Figure 1: Estimated number of holidays booked via travel agents, 2009-19
              • In-store sales unlikely to benefit from an outbound recovery
                • Figure 2: Estimated number of overseas holidays booked via travel agents, 2009-19
              • In-store domestic holiday sales expected to remain flat
                • Figure 3: Estimated number of domestic holidays booked via travel agents, 2009-19
              • Market factors
                • Package holidays performed comparatively well during the recession…
                  • … but the long-term shift to independent bookings is set to resume
                    • Domestic market should avoid contraction, despite an outbound recovery
                      • High street agents could enjoy a minor boost from operator failures
                        • ATOL changes could increase costs for smaller firms
                          • Companies, brands and innovation
                            • Figure 4: Top 10 UK travel agents, by number of retail stores, including concessions and partner stores, November 2014
                          • Thomas Cook’s retail estate remains the largest in the UK
                            • Virgin Holidays expands its ‘retail lite’ concept store
                              • Hays Travel acquires Bath Travel and its 60 retail stores
                                • Flight Centre remains committed to the high street
                                  • Midcounties’ expansion continues after acquiring six new branches
                                    • Big two continue to dominate the UK market by passengers licensed
                                      • The consumer
                                        • Use of travel agents has fallen from a third to a fifth in just one year
                                          • Usage highly fragmented outside the top two operators
                                            • Figure 5: Travel agent brands used, September 2014
                                          • Customer experience is the linchpin for maintaining in-store sales
                                            • Figure 6: Influencers on choice of travel agent, September 2014
                                          • Demand for differentiated products is low, despite strong sales
                                            • A third of customers carry out their own research before booking in-store
                                              • Figure 7: Attitudes towards travel agents, September 2014
                                            • Visitors prefer to go away and think about options
                                              • There is an opportunity to improve the sale of ancillary products
                                                • Half of adults interested in concept store features
                                                  • Figure 8: Demand for in-store features, September 2014
                                                • What we think
                                                • Issues and Insights

                                                    • Can the rollout of new concept stores save the high street?
                                                      • The facts
                                                        • The implications
                                                          • How can agents cater to a better-informed customer?
                                                            • The facts
                                                              • The implications
                                                              • Trend Application

                                                                  • Trend: Guiding Choice
                                                                    • Trend: Influentials
                                                                      • Mintel Futures: Human
                                                                      • Market Drivers

                                                                        • Key points
                                                                          • Package holidays performed comparatively well during the recession…
                                                                            • Figure 9: Forecast volume of UK overseas package holidays, 2008-18
                                                                          • … but the long-term shift to independent bookings looks set to resume
                                                                            • Figure 10: Forecast volume of UK overseas independent holidays, 2008-18
                                                                          • Domestic market should avoid contraction, despite an outbound recovery
                                                                            • Figure 11: Forecast volume of domestic holidays, 2019-19
                                                                          • High street agents could enjoy a minor boost from operator failures
                                                                            • Figure 12: ATOL tour operator failures/closures in the UK, 1 January-20 October 2014
                                                                          • ATOL changes could increase costs for smaller firms
                                                                          • Who's Innovating?

                                                                            • Key points
                                                                              • Thomas Cook trials in-store virtual reality content
                                                                                • Virgin Holidays to expand its v-room lounges to the high street
                                                                                  • Thomas Cook launches holiday deals through Twitter
                                                                                    • Virgin Holidays and Microsoft partner to launch Plan-it Mojo
                                                                                    • Market Size and Forecast

                                                                                      • Key points
                                                                                        • Decline in in-store bookings set to continue
                                                                                          • Figure 13: Estimated number of holidays booked via travel agents, 2009-19
                                                                                        • In-store sales unlikely to benefit from an outbound recovery
                                                                                          • Figure 14: Estimated number of overseas holidays booked via travel agents, 2009-19
                                                                                        • In-store domestic holiday sales expected to remain flat
                                                                                          • Figure 15: Estimated number of domestic holidays booked via travel agents, 2009-19
                                                                                        • Forecast methodology
                                                                                        • Market Share

                                                                                          • Key points
                                                                                            • Thomas Cook’s retail estate remains the largest in the UK
                                                                                              • Figure 16: Top 10 UK travel agents, by number of retail stores, including concessions and partner stores, November 2014
                                                                                            • Virgin Holidays expands its ‘retail lite’ concept store
                                                                                              • Hays Travel acquires Bath Travel and its 60 retail stores
                                                                                                • Flight Centre remains committed to the high street
                                                                                                  • Midcounties continues expansion after acquiring six new branches
                                                                                                    • Big two continue to dominate by passengers licensed
                                                                                                      • Figure 17: Top 20 UK travel companies, ranked by ATOL passenger licences, October 2014
                                                                                                  • Companies and Products

                                                                                                      • Thomas Cook Group PLC
                                                                                                        • Background
                                                                                                          • Financial performance and strategy
                                                                                                            • Figure 18: Financial performance of Thomas Cook Group PLC, 2012 and 2013
                                                                                                          • TUI Travel PLC
                                                                                                            • Background
                                                                                                              • Financial performance and strategy
                                                                                                                • Figure 19: Financial performance of TUI Travel PLC, 2012-14
                                                                                                              • Virgin Holidays Limited
                                                                                                                • Background
                                                                                                                  • Financial performance and strategy
                                                                                                                    • Figure 20: Financial performance of Virgin Holidays Limited, 2012 and 2013
                                                                                                                  • The Midcounties Co-operative Ltd
                                                                                                                    • Background
                                                                                                                      • Financial performance and strategy
                                                                                                                        • Figure 21: Financial performance of The Midcounties Co-operative, 2013 and 2014
                                                                                                                      • STA Travel Limited
                                                                                                                        • Background
                                                                                                                          • Financial performance and strategy
                                                                                                                            • Figure 22: Financial performance of STA Travel Limited, 2012 and 2013
                                                                                                                          • Flight Centre (UK) Limited
                                                                                                                            • Background
                                                                                                                              • Financial performance and strategy
                                                                                                                                • Figure 23: Financial performance of Flight Centre (UK) Limited, 2012 and 2013
                                                                                                                            • Brand Research

                                                                                                                              • Brand map
                                                                                                                                  • Figure 24: Attitudes towards and usage of brands in the travel agent sector, September 2014
                                                                                                                                • Correspondence analysis
                                                                                                                                  • Brand attitudes
                                                                                                                                    • Figure 25: Attitudes, by travel agent brand, September 2014
                                                                                                                                  • Brand personality
                                                                                                                                    • Figure 26: Travel agent brand personality – macro image, September 2014
                                                                                                                                    • Figure 27: Travel agent brand personality – micro image, September 2014
                                                                                                                                  • Brand experience
                                                                                                                                    • Figure 28: Travel agent brand usage, September 2014
                                                                                                                                    • Figure 29: Satisfaction with various travel agent brands, September 2014
                                                                                                                                    • Figure 30: Consideration of travel agent brands, September 2014
                                                                                                                                  • Brand recommendation
                                                                                                                                    • Figure 31: Recommendation of selected travel agent brands, September 2014
                                                                                                                                • The Consumer – Use of Travel Agents

                                                                                                                                  • Key points
                                                                                                                                    • Use of travel agents has fallen from a third to a fifth in just one year
                                                                                                                                      • Figure 32: Use of travel agents, September 2014
                                                                                                                                    • Usage is highly fragmented outside of the Thomas Cook-TUI duopoly
                                                                                                                                      • Figure 33: Travel agent brands used, September 2014
                                                                                                                                  • The Consumer – Influences of Choice of Travel Agent

                                                                                                                                    • Key points
                                                                                                                                      • Customer experience is the linchpin for maintaining in-store sales
                                                                                                                                        • Figure 34: Influencers on choice of travel agent, September 2014
                                                                                                                                      • Demand for financial protection could provide a boost to in-store sales
                                                                                                                                        • Demand for differentiated products is low, despite strong sales
                                                                                                                                          • Over-65s the least likely to be influenced by sales or discounts
                                                                                                                                            • Clear age divide in demand for expert staff
                                                                                                                                            • The Consumer – Attitudes towards Travel Agents

                                                                                                                                              • Key points
                                                                                                                                                • A third of customers do their own research before booking in-store
                                                                                                                                                  • Figure 35: Attitudes towards travel agents, September 2014
                                                                                                                                                • Pushing for immediate sales can be a deterrent
                                                                                                                                                  • Opportunities to improve the sale of ancillary products
                                                                                                                                                    • Trust is key to building customer loyalty
                                                                                                                                                    • The Consumer – Demand for In-store Features

                                                                                                                                                      • Key points
                                                                                                                                                        • The positive impact of concept stores will be limited
                                                                                                                                                          • Figure 36: Demand for in-store features, September 2014
                                                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                                                          • Figure 37: Forecast number of holidays booked via travel agents, 2014-19
                                                                                                                                                          • Figure 38: Forecast number of overseas holidays booked via travel agents, 2014-19
                                                                                                                                                          • Figure 39: Forecast number of domestic holidays booked via travel agents, 2014-19

                                                                                                                                                      Companies Covered

                                                                                                                                                      • Association of British Travel Agents (The)
                                                                                                                                                      • Bales Worldwide
                                                                                                                                                      • Delta Air Lines, Inc.
                                                                                                                                                      • Flight Centre (UK) Ltd
                                                                                                                                                      • Gold Medal Travel Group PLC
                                                                                                                                                      • Intrepid Travel
                                                                                                                                                      • London Stock Exchange plc
                                                                                                                                                      • Midcounties Co-operative Ltd
                                                                                                                                                      • Post Office Counters Ltd
                                                                                                                                                      • STA Travel
                                                                                                                                                      • The Boeing Company
                                                                                                                                                      • The Freedom Travel Group Ltd
                                                                                                                                                      • Thomas Cook Group PLC
                                                                                                                                                      • Thomson Holidays
                                                                                                                                                      • TUI AG
                                                                                                                                                      • Virgin Atlantic Airways Limited
                                                                                                                                                      • Virgin Holidays

                                                                                                                                                      Travel Agents - UK - December 2014

                                                                                                                                                      £1,995.00 (Excl.Tax)