Bricks-and-mortar travel agencies have a future provided they take a “more cautious” approach to trading in the current environment, according to Abta chairman Alistair Rowland.
Speaking in a Future of Travel Week session focussed on distribution, Blue Bay Travel chief executive Rowland, who joined from Midcounties Co-operative Travel this month, said personalisation and relationships were “king” to gaining clients’ trust.
But he warned agents would struggle to run large, high-rent shops in a climate of low booking volumes.
Co-operative Travel high-street shops had seen a rise in business as soon as they re-opened this summer because customers wanted to see agents, who they had built up long-term relationships with, said Rowland.
But he said sensible metrics governing rent levels, locations, and overall running costs – similar to ones used by Midcounties over the last 20 years when it came to new shop openings – needed to be in place for retailers to survive on the high street.
He said: “Provided there is a cautious approach then I think retail has a future. Primary sites, secondary towns, a cap out on rent at £30K…those kind of metrics need to be place.”
He compared this with an annual rent of around £250,000 for a shop in a large shopping centre. “I don’t think there will be enough bookings to keep that cost base,” he said.
“It’s okay if you are vertically-integrated and doing it for brand awareness. A cautious approach to retail will continue to win through, all be it in the short term.”
Rowland also predicted hoteliers would change who they work with in future and enter partnerships with more specialist operators or agents, rather than exclusive deals with one, large tour operator.
Many hoteliers had their fingers burnt by working exclusively with Thomas Cook when it failed, losing their UK business overnight.
He said: “Hotels will be cautious about offering exclusivity to anyone, particularly any kind of operator that could pick you one season and drop you the next.
“I see the model changing in terms of who hoteliers work with now, it’s more likely relationships will be in the ‘middle ground’ for anyone who can get an Atol or grow their Atol numbers. I think distribution will be spread among more specialists and less generalists.”
Blue Bay Travel sells its hotel product, Blue Bay Hotels, and exclusive packages through Midcounties Co-operative Travel shops, its Personal Travel Agents and other agents in the Midcounties’ consortium.
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