Travel Counsellors has reacted to market ‘volatility’ caused by Brexit by driving more long-haul, all-inclusive and tailormade business.
The homeworking firm said, with consumer confidence hit by Brexit ahead of the original March leave date, its agents were supported to focus on selling more complex holidays.
Travel Counsellors says because these are holidays that customers are more likely to use a travel consultant to buy from the firm has continued to grow strongly this year although at a reduced rate.
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For the financial year to October 31 2018 total transaction value (TTV) was £577.66m, up 14.4%, revenue increased 20.9% to £262.16m, and profit before tax was £18.24m, up 23.6%.
EBITDA, a more accurate measure of a firm’s profitability after costs and other income are taken into account, was £19.56m, up 13.9% on the previous financial year.
Steve Byrne, Travel Counsellors managing director, told Travel Weekly that so far this year TTV was up around 11%, revenue 18%, and it is forecasting EBITDA growth of 10% at year end.
Byrne said last year saw the proportion of sales transacted through Travel Counsellors’ in-house Phenix technology has risen to above 50% as the firm operates increasingly as a tour operator.
And he said Travel Counsellors is “outperforming a market” which is “at best flat” with like for like TTV growth up around 11%.
Podcast: Travel Counsellors’ Steve Byrne
“We have had positive year-on-year growth so far throughout this financial year but there have been variations month by month and trading has picked up in the last month or so.
“We have been proactive, where there has been uncertainty, supporting our counsellors to focus not just on mass market but tailormade and long-haul holidays, and also people looking more for all-inclusive to get that fixed price.
“Increasingly, strategically, we have driven this and Brexit has helped in driving more of our product with greater complexity.
“The greater the complexity the greater the demand for travel advisors to create the holiday for you. The simpler it is the more easy it is to book online yourself. We want to encourage more premium travel.
“Despite current uncertainties in the market these results demonstrate an increasing consumer appetite for bespoke travel experiences, designed and delivered by an expert advisor who takes time to get to know them personally, and is available 24/7 if required.”
Travel Counsellors revealed ong-haul packages are up 15% in the year to date and mid-haul up 12%, while short-haul package sales are down 1%.
In July to date long-haul packages are the strongest performing holiday type, up 19%, although the firm has seen a rebound in short-haul demand in the lates market with the sector up 15%, 62% of which are for summer 2019 departures.
Byrne said bookings for next year remain healthy and strong demand for corporate travel has also helped Travel Counsellors to offset the impact of Brexit in the leisure market this year.
He added Travel Counsellors will continue to invest, particularly in its tour operating and direct contracting capabilities and in its technology.
Investment in technology this year has been incresed to £7m, up from £6m the prior year. In 2015 the firm spent just £3m on technology, the equivalent of £2,000 per agent compared to £3,500 per agent in 2018.
It has recently developed a new transfers portal in Phenix and revamped its myTC consumer mobile app including launching a desktop version.
“What we have been focused on is investing,” Byrne said. “All the data shows that businesses that carry on investing perform better than those when the better times return.
“One of the biggest investments we have made is in our app. We know it bring benefits in terms of making the transaction easier and converting quotes into bookings.
“It makes it easier for the customer to book, they just have to press a button and say book it for me.”
Byrne said with Brexit delayed and the future unclear consumer confidence continues to be the major issue for travel and that both businesses and consumers like certainty.
He said the recent change in Prime Minister means people are having to get their heads around the possibility of a no deal Brexit and Travel Counsellors will plan for this to make sure it is ready for the October 31 leave date.
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