Agents face bleak winter

The trade fears one of the grimmest winters for years amid growing concerns that more agencies will go out of business.

In the past month, there have been five ABTA agency failures – Cruise Control, PA Travel, Touchdown Travel, Travel Options International and Phileas Fogg Travel – compared to three in the same period last year. As Travel Weekly went to press, another miniple was understood to have put its business up for sale.

High-street agents claim the situation has been compounded by operators continuing to charge fuel supplements, ranging from £20 to £55, for 2006.

Recent research among 1,000 agents by analysts Plimsoll Publishing found 28% were working on reduced margins or at a loss to cling on to sales.

Plimsoll’s figures show average industry margins are now 1.1%, with 27% of companies losing money. Midconsort Travel Group chief executive Charles Eftichiou said: “Agents are sacrificing profit to keep sales. Low margins and losses equal increased debt. It’s a recipe for disaster.”

Plimsoll senior analyst David Pattison said the problem could be long term. “As people are more confident to book in different ways and don’t need agents’ reassurance, it undermines the good job agents do.”

Bath Travel managing director Stephen Bath said every agent is suffering from a general retail downturn, but admitted supplements are an added issue. “Holidays are more expensive and some customers will walk away,” he said.

Phileas Fogg had 2,500 forward bookings and Travel Options, which failed after 17 years, left around 300 unfulfilled bookings. It is not known how many clients were affected by Touchdown Travel’s failure.

ABTA said struggling agencies typically collapsed once the summer flood of bookings dried up. A spokesman said: “In the past 10 years, the annual failure rate has hovered at 25 to 30 agencies. “At this time of year, we expect a little flurry. In 1991 we had 120 failures due to the Gulf War, so things are much improved.”