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TRAVEL AGENTS - UK - DECEMBER 2017

Published By :

Mintel

Published Date : Dec 2017

Category :

Travel Services

No. of Pages : N/A

Small independent shops may struggle to compete with the leading chains when it comes to the latest technology, but with Thomas Cook and TUI focusing increasingly on selling their own bespoke holidays, this opens up an opportunity for independent shops to sell a greater diversity of products, and to proactively promote their individuality as a key point of differentiation.

Table of contents
OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
Travel shop bookings are dwindling, but still account for one in six holidays
Figure 1: Estimated total number of holidays booked via travel agents, 2012-22
Store numbers down by around 80 per year over past decade
Figure 2: Top UK travel agents, by number of retail stores, November 2016-17
Half of customers use Thomas Cook, one third use TUI
Figure 3: Use of travel agent shops for holiday research and booking, September 2017
One in five consumers have booked in a travel shop in last 12 months
Figure 4: Use of travel agent shops for holiday research and booking, September 2017
Beyond the beach
Figure 5: Type of holiday booked at travel agents, September 2017
Specialise to survive
Figure 6: Interest in using specialist travel agents, September 2017
Tech potential
Figure 7: Agreement with attitude statements towards travel agents, September 2017
What we think
ISSUES AND INSIGHTS
Attracting a new generation of travel shoppers
The facts
The implications
Specialisation: the silver shop
The facts
The implications
Specialisation: the solo shop
The facts
The implications
Specialisation: the ethical shop
The facts
The implications
Destination experiences can add value to packages
The facts
The implications
THE MARKET WHAT YOU NEED TO KNOW
Travel shop bookings down slightly in 2017 as online shift continues
Shop numbers have fallen 17% since 2008
But 16 million shop bookings still expected by 2022
2017 a record year for holidays abroad, but uncertainty lies ahead
Spanish surge continues, but Turkey shows signs of recovery
Monarch collapse shows value of support in a crisis
MARKET SIZE AND FORECAST
Travel shops continue to lose market share
Figure 8: Estimated total number of holidays booked via travel agents, 2012-22
Figure 9: Estimated number of overseas and domestic holidays booked via travel agents, 2012-22
Forecast
Figure 10: Estimated total number of holidays booked via travel agents, 2012-22
but bricks-and-mortar retail still has a big part to play
MARKET BACKGROUND
Household budgets under pressure as economy slows
Figure 11: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year-on-year, January 2014-October 2017
Pound pushing up holiday prices
Figure 12: Spot exchange rate, Pound Sterling vs selected currencies, June 2016-November 2017
Overseas holidays reach record levels, but growth starting to slow
Figure 13: Domestic and overseas holiday volume and expenditure, 2012-17
Shops need to diversify range of package products
Figure 14: Independent vs package overseas holiday volume, 2012-17
Shops should promote alternatives to Spain
Figure 15: Top 20 overseas holiday destinations, by number of trips, 2012-16
Monarchs failure can focus attention on supportive role of the travel agent
Figure 16: ATOL tour operator failures/closures in the UK, 1 January-21 November 2017
KEY PLAYERS WHAT YOU NEED TO KNOW
Cook on the money
TUI takes right-brain approach with Destination U
Expanding Hays launches tie-up with Smiths
V-Rooms are helping to shore up the strongest travel shop brand
Kuoni developing in-store expertise in LGBT and wellness markets
Barrhead introduces branded robots
Taking advantage of mature traveller potential.
MARKET SHARE
Number of shops has fallen 17% since 2008
Figure 17: Top UK travel agents, by number of retail stores, November 2016-17
Cook cutting estate, but opening more Discovery stores
TUI launches Holiday Design Store 2.0
Hays branches out into WH Smith
Virgin expanding V-Rooms
Kuoni adds two more John Lewis concessions
Barrhead moves south of the border
Shop numbers stable at Flight Centre, Trailfinders and STA
Midcounties is now the largest chain with the Co-op name
10 branded chains account for half of market supply
Jet2holidays expansion boosts supply in independent shops
Figure 18: Top 20 UK travel companies, ranked by ATOL passenger licences, November 2015-17
LAUNCH ACTIVITY AND INNOVATION
TUI developing Destination U
Barrhead recruits robots
STA attracts publicity with flash sale
Mature approach
Shops can integrate travel and lifestyle trends
BRAND RESEARCH
Brand map
Figure 19: Attitudes towards and usage of selected brands, October 2017
Key brand metrics
Figure 20: Key metrics for selected brands, October 2017
Big two brands score high on trust
Figure 21: Attitudes, by brand, October 2017
Big two seen as accessible, but Virgin the most fun
Figure 22: Brand personality Macro image, October 2017
Virgin overpriced but stylish
Figure 23: Brand personality Micro image, October 2017
Brand analysis
Virgin has strongest image, but faces value for money challenge
Figure 24: User profile of Virgin Holidays, October 2017
Brand analysis
Re-brand gives TUI chance to refresh package perceptions
Figure 25: User profile of TUI/Thomson, October 2017
Brand analysis
Cook now the best-known brand, but image lags behind TUI
Figure 26: User profile of Thomas Cook, October 2017
Brand analysis
Trailfinders scores highest excellent rating after Virgin
Figure 27: User profile of Trailfinders, October 2017
Brand analysis
WH Smith plan offers Hays a chance to strengthen brand perceptions
Figure 28: User profile of Hays Travel, October 2017
Brand analysis
STAs weak image may be affected by backpacker associations
Figure 29: User profile of STA Travel, October 2017
Brand analysis
Flight Centre more likely to be seen as basic
Figure 30: User profile of Flight Centre, October 2017
Brand analysis
THE CONSUMER WHAT YOU NEED TO KNOW
Shops have 70% conversion rate of lookers to bookers
Millennial events
Cook is the most widely used shop brand
Over half of most affluent group book long-haul
Shops need to diversify
Luxury expertise a clear opportunity
Mixed opinions on the value of travel shops
New technology can prove popular, but more awareness needed
TRAVEL AGENT USAGE
Seven in 10 shop researchers also book
Most digitally confident consumers are also the most likely to use travel shops
ABs and C2s most likely to book in travel shops
Figure 31: Use of travel agent shops for holiday research and booking, September 2017
Figure 32: Use of travel agent shops for holiday booking, by region, September 2017
Around half of travel shop users visit Thomas Cook
Figure 33: Use of travel agent shops for holiday research and booking, September 2017
Londoners most likely to shop around
Figure 34: Number of travel agent brands used for holiday research and booking, September 2017
Cook has most loyal customers out of big two brands
Independence can be a growing point of differentiation
TRAVEL AGENTS PRODUCTS BOOKED
Half of higher income shop customers buy long-haul
Destination experiences are an under-developed opportunity for shops
Figure 35: Types of booking made at travel agents, September 2017
City break opportunities
Figure 36: Type of holiday booked at travel agents, September 2017
Older Millennials likely to book a diverse range of holidays
Figure 37: Number of holiday types booked at travel agents, September 2017
TRAVEL AGENTS POTENTIAL FOR SPECIALISATION
Demand for luxury specialisation
Older traveller opportunity
Solo-friendly shops can appeal to a poorly served demographic
Figure 38: Interest in using specialist travel agents, September 2017
Ethical and LGBT potential
TRAVEL AGENTS ATTITUDES
Half of adults say travel shops are a thing of the past
But specialised knowledge and time-saving can still be powerful messages
Figure 39: Agreement with attitude statements towards travel agents, September 2017
Online seen as cheaper and offering better choice
Promotional events/sales are quickest way to get people through the door
In-store technology sparks consumer interest, but awareness needs to be raised
Figure 40: Agreement with further attitude statements towards travel agents, September 2017
Scope for charging consultation fees among premium customers
Millennials prefer a mix of communication methods
Consumers are pessimistic about future of travel shops
CHAID ANALYSIS
Methodology
Parents are the most likely people to value travel shops
Figure 41: Target groups based on attitudes towards travel agents CHAID Tree output, September 2017
Figure 42: Target groups based on attitudes towards travel agents CHAID Table output, September 2017
APPENDIX
Definitions
Abbreviations

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