| Journal: TWUK | Section: |
| Title: | Issue Date: 07/08/00 |
| Author: | Page Number: 22 |
| Copyright: Other |
Can agents see life after the Web?
What’s the future for high-street agents? In this feature, we gauge the views of multiples, independents and those involved in new technology. Travel Weekly editor Jeremy Skidmore asks the questions
Our guests were gathered at lunch to discuss the future of the high-street travel agent. Much has been written about Internet companies and the impact they will have on bookings but we wanted to know how travel agents will adapt in the new world.All present felt travel agents had a strong future but expected they would have to change significantly over the next few years.
ARTAC chairman Colin Heal said to compete with new forms of distribution, travel agents would have to offer higher standards of service and invest in technology.
“The investment in technology is not cheap,” he said. “Those who belong to consortia will have a distinct advantage because they will have access to that technology but those that are non-aligned will find it increasingly difficult. Brands that customers can trust will also become extremely important.”
Heal expected there would be less agents in the future but where did he think the casualties would come?
“I think there will be a mixture of closures among the little guys and the big guys. There’s no reason why the good independents should really suffer.”
Thomas Cook retail managing director Manny Fontenla-Novoa added that closures of agencies will be in periphery areas. “There will be a movement away from secondary sites to shopping centres like Bluewater in Kent,” he said. “And there will be some high-street consolidation. Some 20%-25% of bookings will go direct in the future and the cake isn’t getting any bigger,” he said.
Despite heading up one of the biggest multiples, Fontenla-Novoa backed independents to prosper in the future. “The independents are smarter at knowing their clients and that’s very important,” he said.
Thomson Travel Group UK distribution head of e-tailing Paul Kendrick and travelchest.com director Stephen Rhodes both agreed that new forms of retailing would sit well with traditional methods.
Travelchest.com is planning to have a chain of 40 agencies and Rhodes added: “Internet companies may end up with travel agencies, shops or cafes to back up what they are offering on-line.”
Different shops for different markets
Rhodes pointed out the one-size-fits-all formula for travel agents is a thing of the past.
“Travel agents in various markets will have to offer something different,” he said.
Kendrick added:”They will be more consultative and able to give you advice, for example on what to use on the Internet.”
Bakers Dolphin managing director Kevin Abbey said it was important agents knew their market.
“We’ve got an extremely upmarket branch in Bath, with people spending tens of thousands of pounds and it’s lavishly decorated. That wouldn’t work at all in Bristol.”
How good is current service from agents?
All present agreed that service levels will be critical to agents in the future. At present, it’s just not good enough, according to Abbey.
“People talk about service but no-one has addressed the salaries that are paid to the so-called travel experts,” he said.
“They are at abysmally low levels and consequently we attract staff who just can’t give the service.
“What value to the customer is an 18-year-old who hasn’t travelled to any real degree and knows less about the product than the customer?
“A lot of the stuff which is dubbed as good service at the moment is actually stuff we should be doing anyway as a matter of course.”
What are they doing to improve it?
Heal pointed out that the average age of clerks in independents was older and they had travelled more.
“We’ve also concentrated on product training and starting next month, we will have the Worldchoice Experience with motivational expert Chris Daffy,” he said.
Abbey said Bakers Dolphin was investing more in training so it could sell on the experience of its staff.
“All you can do is take the basic step of bringing in more experienced people at higher salaries and then you can start to offer a higher service level,” he said.
Thomas Cook has invested in World Travel Lounges and travel specialists in its branches.
Fontenla-Novoa said: “I applaud what Kevin Abbey says about competing on service rather than discounts.
“You can do it at the higher level but the reality of the marketplace is there are four big giants all vying for position.”
Rhodes added that travelchest.com was targeting upmarket clients and was attempting to fill a gap in the Internet market by offering a high-quality service from the start.
Is the market ready for service fees?
Travel agents are expected to charge service fees on the sale of British Airways’ tickets from January as the airline has decided to axe commission.
If agents could implement service fees across the board, it would give them the necessary cash to spend on training but our guests felt this was unrealistic in the near future.
Heal pointed out that independents have succeeded in charging £4 for a passport service because people feel they are getting a real benefit but that’s a long way from introducing a fee-based system.
“It’s going to be fairly difficult to introduce service fees but never say never,” said Heal.
Thomas Cook currently charges a flat fee of £10 for transactions under £150 but Fontenla-Novoa said it would not be extending the scheme further.
“If someone else is not charging a fee, then you’ve got no chance,” he said.
“We can’t roll out fees because the public isn’t ready for them. In this market, if you’re not price relevant, you’re dead.”
Hypermarkets
Heal said he had visited hypermarkets and felt they were not customer focused.
“They give you tickets and I think that’s totally unfriendly,” he said.
“There are also several gimmicks in these shops but at the end of the day you want to book a holiday.”
Fontenla-Novoa disagreed.
“Our highest customer service scores are at hypermarkets,” he said.
“I take my hat off to Holiday Hypermarkets managing director John Donnelly because he’s shown the only true piece of innovation in the past few years.
” Whether all the sites will work financially or not remains to be seen but most of us have followed him.
“They’re also bringing in new customers. Only 10% of our hypermarket customers had booked with Thomas Cook before.”
“The independents are smarter at knowing their customer and that’s very important.”
Manny Fontenla-Novoa managing director retail
Thomas Cook
“Internet companies may end up with travel agencies, shops or cafes to back up what they are offering on-line.”
Stephen Rhodesdirector travelchest.com
What will the situation be in
five years’ time?
“Travel agents will be around in good numbers but there will be less than there are at the moment.”
Colin Heal, ARTAC, chairman
“Travel agencies will look different, depending on the market place and what the customer wants.”
Stephen Rhodes, director, travelchest.com
“There’s no question there’ll be fewer of them and agents that survive will be those that embrace technology in their shops.”
Kevin Abbey, managing director, Bakers Dolphin
“The big question is how you integrate all forms of distribution – we are moving from being totally booking driven to being service driven.”
Paul Kendrick, distribution head of e-tailing, Thomson Travel Group UK
“The service agents will offer will be very different and the key will be the staff. The high street will reinvent itself.”
Manny Fontenla-Novoa, managing director retail, Thomas Cook
“Agents will be more consultative and able to give you more advice.”
Paul Kendrickdistribution head of e-tailing Thomson Travel Group UK
“Those independents who belong to consortia will have a distinct advantage because they will have access to that technology but those that are non-aligned will find it increasingly difficult.”
Colin Healchairman, ARTAC
“We’ve got an extremely upmarket branch in Bath, with people spending tens of thousands of pounds and it’s lavishly decorated. That wouldn’t work at all in Bristol.”
Kevin Abbeymanaging director Bakers Dolphin