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Travel Agents - UK - December 2016

“The main selling point in a world of increasing automation will become human expertise (or innovative combinations of the technological and the human). For travel shops this is likely to mean increasing specialisation of knowledge and personalisation of product in order to offer customers something not easily replicated online in their own living room.” 

- John Worthington, Senior Analyst

This report will cover the following areas:

  • Time and knowledge are increasingly valuable commodities in the digital world
  • Travel agents can become value-for-money experts
  • An ageing traveller population will seek health advice
  • Enriching the holiday by selling experiences

Travel agencies are defined as outlets at which holidays or other leisure travel products are purchased, including high street retailers (operating either as standalone shops or concessions in department stores and supermarkets). These include both vertically integrated travel agents (owned by large travel groups that are heavily biased towards selling their own products, although they do sell holidays from other operators) and independent travel agents (those that have no links, in terms of ownership, with any tour operators and thus have the ability to sell any holiday from any operator). Online-only travel agents such as Expedia are also mentioned but are not the focus of this Report.

Many travel agencies also sell via online and telephone channels but the focus of the consumer research in this Report is on personal visits to travel shops.

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • Agency bookings show revival but continue to lose market share
            • Figure 1: Estimated total number of holidays booked via travel agents, 2011-21
          • Package resilience is helpful for shops
            • Figure 2: Independent versus package overseas holiday volume, 2011-16
          • New destination opportunities
            • Shop numbers down 15% in past eight years
              • Cook and TUI developing concept store formats
                • Figure 3: Travel agent brands used, October 2016
              • The multichannel customer
                • Specialise to survive
                  • Figure 4: Type of holidays booked via a travel agent, October 2016
                • Online wins on value for money but shops retain core strengths
                  • Figure 5: Attitudes towards travel agents, October 2016
                • What we think
                • Issues and Insights

                  • Time and knowledge are increasingly valuable commodities in the digital world
                    • The facts
                      • The implications
                        • Travel agents can become value-for-money experts
                          • The facts
                            • The implications
                              • An ageing traveller population will seek health advice
                                • The facts
                                  • The implications
                                    • Enriching the holiday by selling experiences
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • Agency bookings up but share continues to decline
                                            • Rising cost of overseas travel
                                              • Package revival helps shops
                                                • Demand for alternative destinations set to grow
                                                  • Lowcost failure puts protection back in spotlight
                                                  • Market Size and Forecast

                                                    • Travel shop bookings rise but continue to lose market share
                                                      • Figure 6: Estimated total number of holidays booked via travel agents, 2011-21
                                                      • Figure 7: Estimated number of overseas and domestic holidays booked via travel agents, 2011-21
                                                    • Future
                                                      • Forecast
                                                        • Figure 8: Estimated total number of holidays booked via travel agents, 2011-21
                                                      • The impact of the EU referendum vote
                                                          • Figure 9: Alternative market scenarios for the post-Brexit travel agents market, by total volume of bookings, 2016-21
                                                          • Figure 10: Detailed post-Brexit scenarios for the post-Brexit travel agents market, by total volume of bookings, 2016-21
                                                        • A ‘Brexit-recession’ would likely accelerate rate of decline
                                                        • Market Background

                                                          • Macroeconomic factors positive but uncertainty lies ahead
                                                            • Challenging year expected for overseas holidays
                                                              • Figure 11: Domestic and overseas holiday volume and expenditure, 2011-16
                                                            • Packages prove resilient
                                                              • Figure 12: Independent versus package overseas holiday volume, 2011-16
                                                            • Rising demand for Spain
                                                              • Figure 13: Top 20 overseas holiday destinations, by number of trips, 2011-15
                                                            • New long-haul opportunities
                                                              • Pound’s fall set to impact on holiday costs in 2017
                                                                • Figure 14: Sterling exchange rate vs selected currencies, annual averages 2011-15, and spot rate November 2016
                                                              • Lowcost failure likely to boost ATOL packages
                                                                  • Figure 15: ATOL tour operator failures/closures in the UK, 1 January-22 November 2016
                                                              • Key Players – What You Need to Know

                                                                • Supplyside decline
                                                                  • Cook/TUI focus on concept stores
                                                                    • Virgin expands V-Room chain
                                                                      • Brochures out, lifestyle mags in
                                                                        • Specialities of the house
                                                                          • New apps point the way ahead for agents
                                                                          • Launch Activity and Innovation

                                                                            • Mobile shops
                                                                              • Pleasures of print
                                                                                • Specialisation is key
                                                                                  • Human technology interaction
                                                                                  • Market Share

                                                                                    • Long-term decline in supply
                                                                                      • Thomas Cook retains largest estate
                                                                                        • Thomson to rebrand as TUI
                                                                                          • Figure 16: Top UK travel agents, by number of retail stores, November 2016
                                                                                        • Hays continues to expand
                                                                                          • Virgin and Kuoni aim to project brand values via shops
                                                                                            • Barrhead heads south
                                                                                              • High level of fragmentation
                                                                                                • Consumer market share mirrors supply
                                                                                                  • Figure 17: Travel agent brands used, October 2016
                                                                                                • ‘Big two’ suppliers becoming ‘big three’
                                                                                                  • Figure 18: Top 20 UK travel companies, ranked by ATOL passenger licences, November 2016
                                                                                              • Brand Research

                                                                                                  • Brand map
                                                                                                    • Figure 19: Attitudes towards and usage of selected brands, November 2016
                                                                                                  • Key brand metrics
                                                                                                    • Figure 20: Key metrics for selected brands, November 2016
                                                                                                  • Brand attitudes: Virgin rated top on quality
                                                                                                    • Figure 21: Attitudes, by brand, November 2016
                                                                                                  • Brand personality: TUI/Cook seen as most accessible
                                                                                                    • Figure 22: Brand personality – Macro image, November 2016
                                                                                                  • ‘Special’ Trailfinders
                                                                                                    • Figure 23: Brand personality – Micro image, November 2016
                                                                                                  • Brand analysis
                                                                                                    • Virgin scores highest for innovation
                                                                                                      • Figure 24: User profile of Virgin Holidays, November 2016
                                                                                                    • Brand analysis
                                                                                                      • Thomson outperforms Thomas Cook
                                                                                                        • Figure 25: User profile of Thomson, November 2016
                                                                                                      • Brand analysis
                                                                                                        • Cook not seen as an innovator
                                                                                                          • Figure 26: User profile of Thomas Cook, November 2016
                                                                                                        • Brand analysis
                                                                                                          • Flight Centre lacks awareness but scores well on customer satisfaction
                                                                                                            • Figure 27: User profile of Flight Centre, November 2016
                                                                                                          • Brand analysis
                                                                                                            • Co-operative travel dogged by ‘tired’ image
                                                                                                              • Figure 28: User profile of The Co-operative Travel, November 2016
                                                                                                            • Brand analysis
                                                                                                              • Strong ‘excellent’ rating for STA
                                                                                                                • Figure 29: User profile of STA Travel, November 2016
                                                                                                              • Brand analysis
                                                                                                                • Trailfinders punches above its weight
                                                                                                                  • Figure 30: User profile of Trailfinders, November 2016
                                                                                                                • Brand analysis
                                                                                                                • The Consumer – What You Need to Know

                                                                                                                  • Research collaborators
                                                                                                                    • Almost three quarters of travel shop researchers also book in a shop
                                                                                                                      • Long-haul travellers especially likely to visit shops
                                                                                                                        • Beach still dominates
                                                                                                                          • Takeaway brochures still popular for browsing
                                                                                                                            • Pull factors remain
                                                                                                                            • Holiday Research and Booking

                                                                                                                              • One in four holidaymakers are multichannel researchers
                                                                                                                                  • Figure 31: Research activities prior to booking holidays, October 2016
                                                                                                                                • One in four travel shop researchers do not book in-store
                                                                                                                                  • Figure 32: Methods of booking holidays, October 2016
                                                                                                                                • Four in 10 shop bookers are over-55s
                                                                                                                                  • Figure 33: Age profile of those who book in travel agent shops, October 2016
                                                                                                                                  • Figure 34: Lifestage profile of those who book in travel agent shops, October 2016
                                                                                                                                • Shops serve a broad range of household budgets
                                                                                                                                  • Figure 35: Socio-economic profile of those who book in travel agent shops, October 2016
                                                                                                                              • Travel Agent Booking

                                                                                                                                • A third of shop bookers go long-haul
                                                                                                                                  • Figure 36: Type of bookings made via a travel agent, October 2016
                                                                                                                                • Targeting spontaneous short breakers
                                                                                                                                  • Ancillary sales opportunities
                                                                                                                                    • Beyond the beach
                                                                                                                                      • Figure 37: Type of holidays booked via a travel agent, October 2016
                                                                                                                                    • Adventurous agents
                                                                                                                                    • Incentives to Use a Travel Agent

                                                                                                                                      • Value experts
                                                                                                                                        • Figure 38: Things that would encourage people to use a travel agent, October 2016
                                                                                                                                      • Pull of print
                                                                                                                                        • New in-store tech needs to be promoted
                                                                                                                                          • Digital refuge
                                                                                                                                            • Millennial events
                                                                                                                                              • Health matters
                                                                                                                                              • Attitudes towards Travel Agents

                                                                                                                                                • Shops have lost the argument over value for money
                                                                                                                                                  • Expertise is still a pull factor – but less so among non-users
                                                                                                                                                    • Travel curators
                                                                                                                                                      • Time lords
                                                                                                                                                        • Figure 39: Attitudes towards travel agents, October 2016
                                                                                                                                                      • Sense of security
                                                                                                                                                        • Consumers generally negative about agents…
                                                                                                                                                          • …but core strengths are still recognised
                                                                                                                                                          • Appendix

                                                                                                                                                            • Definitions
                                                                                                                                                              • Abbreviations

                                                                                                                                                              Travel Agents - UK - December 2016

                                                                                                                                                              £1,995.00 (Excl.Tax)