Closure of in-store travel agencies a necessary turning point in travel retail, says expert
With the COVID-19 pandemic accelerating the digitisation of the travel agent model, creating more shop closures as in-store agencies switch operations online, one expert says this is a necessary adaptation to changing consumer preferences.
Johanna Bonhill-Smith, a travel and tourism analyst at GlobalData, said the “long-term survival” of in-store travel agencies has been discussed for several years due to the rising popularity of online bookings.
“Success in 2021 will largely depend on good levels of cash flow, an area in which online travel agents (OTAs) continue to be a step ahead of traditional brick and mortar style agencies, thanks to their asset-light business models,” she said.
Only 17 per cent of the 29,744 global respondents in GlobalData’s Q3 2019 consumer survey declared they booked with an in-store travel agent, showing that prior to COVID-19, booking in-store was already decreasing in popularity.
A more recent GlobalData survey in December 2020 found that 47 per cent of 5,766 global respondents would buy more products online rather than visiting a store and 60 per cent would do banking transactions online post-pandemic.
“Lack of revenue and high demand for refunds has taken its toll on many traditional travel agencies,” Bonhill-Smith said.
“High fixed costs including high street rents would have depleted cash reserves further for in-store agents in comparison to OTAs. Store closures were considered essential for many to simply stay afloat during 2020 and some have been made permanent.”
STA Travel, a long-haul flight specialist with more than 50 shops in the United Kingdom, had to cease trading in August 2020 as costs were racking up at a time when there was little income.
Flight Centre closed 421 out of 740 of its stores during COVID-19, while Hays Travel has declared it expects to operate a ‘hybrid’ return to retail with some shops reopening and others to remain closed in relation to the UK Government’s roadmap.
Many staff have declared they are happy to work from home, which may see more permanent shop closures as a result, GlobalData said.
TUI is the most recent to announce a downsizing, with plans to close a further 48 branches in 2021. This, in addition to the 166 TUI shops that were shut in 2020, leaves the company with around 314 branches as it aims to digitise its operations, according to GlobalData.
Bonhill-Smith added: “It now boils down to survival of the fittest. The rollout of vaccinations worldwide, coupled with the supposed release of digital vaccine passports, has offered a beacon of hope for the travel sector.
“However, the news of new variants of COVID-19, coupled with ongoing lockdowns across Europe, suggests 2021 will still be a year that is far from normal.
“Traditional in-store travel agencies have been increasingly under pressure to develop their online directories to remain competitive within the global marketplace.
“The lower the fixed costs for travel agencies, the greater flexibility they will have in servicing the future travel space. Therefore, more shop closures are likely to follow as we enter the so-called ‘new normal’.”
Featured image source: iStock.com/jax10289
Email the Travel Weekly team at traveldesk@travelweekly.com.au
brick-and-mortar flight centre GlobalData Hays Travel retail agency sta travelLatest News
Collette goes off the beaten track with Canyon Country tour
To be clear TW is not advocating actually walking off the beaten track. Avoid the coyotes. Stay on the beaten track.
Intrepid & Korean Tourism Organisation team up to give agents a cooking masterclass
These guys learnt that Korean cooking is more than just putting kimchi on 2-minute noodles (as we once thought).
Winner, winner! Intrepid reveals the 9 lucky agents that won $2k
Who won the incentive? Which Intrepid trip will they spend it on? What day of the week is it again? Where am I? Huh?
Corporate Traveller reports 42% increase in Easter traffic this year
Business travellers just love Easter! Expect plenty of chocolate stained documents returning to the office on Tuesday.
Turbulent year wiped $384m off Qantas brand value: Report
Meanwhile, eating tuna at your desk can damage your own personal office brand value by several thousand dollars.
FAMIL: Room-Res & Singapore Tourism Board shows agents the Lion City’s roar
Click this article to see a man very impressed by a 20-layer chocolate cake. We're not kidding, he loved it!
Oceania Cruises offers sailors free pre-cruise hotel stay
Looking for ways to make your holidays as long as possible? Look no further.
Bonza launches new website to compliment app, agent portal
Does news about an airline's website fill you with ecstasy, glee and joy? Get your hit of the good stuff here.
MTA agents attends ‘Lunch ‘n’ Learn’ with AMA Waterways
When organising the event, Lunch 'n' Learn beat out Dinner 'n' Divulge and Breakfast 'n' Banter. Understandably so.
Travelmarvel reveals 2025 South America tours
If you spot any typos in the newsletter today it is because TW became distracted Googling images of Machu Picchu.
Tourists from 5 countries could be BANNED from visiting Australia
Anthony Albanese's immigration laws could impact tourism from certain countries.
Just how many passengers will Qantas & Jetstar hop around this Easter?
Airline workers are ready for gleeful Easter travellers! Also prepared for sticky children with chocolate on their face.
Air New Zealand gets ready for bumper Easter weekend
Air NZ gears up for travelling passengers this Easter, while TW looks to beat our egg eating record. 117 here we come!
Four Seasons Yachts reveals first itineraries to the Caribbean & Mediterranean
These trips look so good we wish there were five seasons! Alright, we'll see ourselves out...
FAMIL: Travellers Choice treats top agents to the wonders of Rotorua
This one's got plenty of famil pics and no one looks shockingly hungover in them! Clearly no TW staffers were there.
European Waterways celebrates 50th anniversary with week-long founders cruise
Plan on celebrating your 50th anniversary with a bottle of Moët and fairy bread? European Waterways has better ideas.
100th route! Jetstar celebrates the launch of Brisbane-Avalon with 12 hour sale
Jetstar knocks a ton and celebrates with a sale while TW once scored a ton and celebrated with about 17 beers.
Record-breaking year for NSW as visitor expenditure soars past $50 billion
Enjoy running round the Opera House? Be prepared to elbow even more tourists out the way.
Norwegian Cruise Line makes play for solo travellers
NCL ensuring you don't have to go trawling Tinder to find a cruise partner. Thank goodness, we were sick of catfishing.
Entire Travel Group’s Canada and Europe 2024/25 brochures are out now
Entire's new brochure is bittersweet; it both informs your clients and makes you envious of the holiday they'll take.
Malaysia Airlines adds 3 new destinations & A330neo seats
More seats means cheaper airfares and more money to spend on overpriced airport sandwiches. Woohoo!
Two divine days onboard Crystal Serenity
It's only pure serenity onboard this ship. Anxiety, agitation and anguish have been rejected by the bouncer.
How the Globus Family of Brands elevates coach touring: Travel Weekly TV with Chris Fundell
Chris' here so you don't think coaches mean peeling your thighs off a sticky leather seat every time you stand up!
The Flight Centre Foundation gears up for massive 2024 with 3 new board members
The foundation looks to invest $200k this year, spurring the TW journos to figure out how to qualify as a charity.
Barking Owl Communications to head up Anantara & Avani in ANZ
Fellow PR competitors had been barking up the wrong tree even thinking of bidding for this job!
Amex GBT to purchase CWT for $871m
It's big deals like this that get a firm handshake - hence the sore hands over at the CWT and Amex GBT offices.
1000MTG’s second global conference reminds agents to ‘strive and thrive’
Alongside messages to 'strive' and 'thrive' were those to 'survive', 'drive', 'arrive' and 'jive' (when appropriate).
Qantas A330 makes “loud bang”, pilots forced to shut down one engine
Qantas refusing to let Boeing have all the headlines in aviation world today!
GX Community Tourism Summit 2024 location revealed!
The new location has arrived and it'll blow your socks off! Time for another trip to Target for more socks then.
Visiting the destination my Mum didn’t want me to
Yet again, this journo has been a stress to his mother. Discover how this trip spurred his mother's anxiety here.
Agents come out of their shells at P&O’s turtle hatchery event
For some, it's a few glasses of bubbles to lure them out of their shell. For these agents, it was a bit more literal.
Boeing cleanout: CEO, chair to go as safety crisis plagues the manufacturer
CEOs are falling thick and fast these days. We should have started up a bingo game with their headshots in the office.
Virgin looks to swap MAX 10 order for MAX 8s amid Boeing delays: Reports
Virgin has changed its order for something smaller. Much like we have to at Maccas following a worrying doctor's visit.
Club Med unveils newest luxury yacht for 2024/25 early bird sale
This yacht is preserved for the early birds! Night Owls may also get onboard depending how late they stay up.
Abercrombie & Kent 2024 Asia Portfolio is here
Round up the family and get planning an Asia jaunt. Or, if they're hard to handle, brush them all and go it alone!
Elevate your earnings: Final days to secure double commission with Inspiring Vacations’ March offer
What could inspire you to sell more Inspiring Vacations? Double commission of course! That's all the inspiration needed.