The niche travel sector is one of the most resilient, fastest-growing and potentially lucrative for agents, according to a panel of niche operators who got together for a Travel Weekly round-table discussion.
The debate focused on how smaller operators who do not have the budget to spend on training and distributing their product through an expansive network of agents can encourage the agency community to come forward to work with them.
The panel agreed many agents are fearful of selling niche product, despite the benefits. These include the commissions available on higher-value holidays, developing a loyal repeat business, being able to offer a unique service and the environmentally friendly nature of many niche operators.
Opening the debate, Orient Lines UK general manager Francis Riley, said: “The tourism landscape is changing. There has been a move towards more experienced-based holidays people want those ‘once in a lifetime’ trips or time off to reconnect with family and friends.
“Travellers are also keen on developing special interests and exploring their beliefs. People want to holiday with like-minded people who want to do similar activities, and niche holidays lend themselves to group breaks.”
The development of this market is made evident by the fact that major multiples are reacting to this demand First Choice’s profits are now split 50/50 between its mainstream holidays and activity breaks, Riley said.
“Niche holidays represent good value for agents who need to attract high-spending clients. An agent selling an Antarctica cruise with Orient Lines can earn between £750 and £1,000 in commission.”
Riley added it was the niche sector that showed the first signs of revival following the September 11 attacks, proving the resilience of the consumer in this sector.
The fear factor
Many niche operators are willing to develop close partnerships with agents and even take clients through the selling process if an agent does not feel sufficiently well-informed to close the deal.
With the exception of Cadogan and Orient Lines, the niche operators on the panel said only around 10% of sales come through agents.
Barefoot Traveller general manager Gillon Campbell said: “There is a fear for agents because there are so many niche operators, and it’s about having an understanding which operators work with agents. In the past we worked on an ad-hoc basis with the trade but now we are trying to build a relationship with agents.”
Wildlife Worldwide managing director Chris Breen said he works very closely with around 10 agents. “It’s very much a partnership,” he said. “If they do not feel they have sufficient knowledge we will gladly speak to their clients and sell the holiday. That works very well because they are encouraged to introduce people to us. A lot of agents are ill-informed about our products and there is a tendency for them to default to handling the easiest products to sell.
“There is a misperception that we are the only ones with the knowledge. We have passion and the enthusiasm for what we do and that’s the key, if you too have that passion and enthusiasm you can sell it.”
Pax Travel managing director Philip Dean said even though customers want to deal with a travel agent face to face, his company will speak with their clients directly to make sure they get the holiday they want, offering the same level of service as they do for direct customers.
“I try to treat [agents] as partners. We were organising a trip to Rome for an agency in Kent and we went to their shop to do a presentation. In doing so we treated them as a partner so they were not afraid we would go direct behind their backs and cutting them out. I don’t approve of that.”
Expertise
Niche customers not only expect travel agents to have the same level of expertise as their doctor, but also for operators to cater for their special interests.
Riley said Orient Lines has seen its programme of guest lectures increase by 30% in recent years, with the likes of TV presenter Jilly Goulden giving talks about wine.
Dean said operators that specialise in a niche area are ideally placed to offer these tailor-made touches. “What people are looking for is added value,” he said. “A lot of our clients phone and say: ‘We’re going to Rome and we’ve booked our hotel. Can you book a flight or an excursion?’
“We can do everything. We can get them a hotel, we can get a flight, we can even get them in to see the Pope – you can’t get that on the Internet.”
The panel was told agents must also look to specialise. Riley added: “Many agents are saying: ‘If I’m going to just sell mass market, I’m on a hiding to nothing’.”
Cadogan Holidays managing director Tom Allen said: “Agents are changing but the problem is they can’t be generalist anymore because consumers can find out a lot more on the Internet. Agents have to specialise in a niche area or in terms of the type of client they are targeting.”
Breen said: “Are agents getting their fair share of our business? I suspect the answer is probably not. Some companies round this table are crying out for more agent sales.”
Campbell said there is a limit to how much agency training small operators can do. He said: “It’s important for an agency to have a specialist, someone who has a passion for what they are selling.”
The environment
Agents with niche knowledge can gain a competitive advantage as customers become more environmentally aware.
Pax Travel works closely with local suppliers in the countries it sells trips to, such as Peru, and as part of the Association of Independent Tour Operators, adheres to its strict responsible tourism policies.
“To be environmentally friendly you have to look after your suppliers. We let our clients know what we are doing,” said Dean, who added that more customers have started demanding ‘green’ holidays in the past year.
“A year ago there were few companies that worked like this, now if you don’t, you’re damned.”
Allen said operators have a duty to make sure they are not ruining the environment they send customers to, although he believed the environment is not as important for consumers the more mass market the product is.
“It’s certainly the flavour of the month. A lot of agents we are talking to, and maybe this is more the mass market, are not convinced it helps to sell more holidays. Staying at home and driving your car is probably worse for the environment than going on holiday, but the spotlight is on our industry.”
However, Campbell said small operators are, by their very nature, greener. “Smaller operators have schemes where you can give charitable donations to destinations. We use hotels that are owner-operated and run by local people, so by selling that holiday you are supporting the economy of that country rather than the global interests of a large conglomerate.”
Breen said Wildlife Worldwide has been offering carbon offsetting through environmental organisation Climate Care for the past three years, long before mainstream operators introduced similar schemes.
“Being seen to be environmentally friendly is not just a marketing exercise but a matter of survival for the travel industry,” Dean said. “If we show we are at the forefront of being green we are destroying the argument of those who are saying we should not have holidays, whether they are luxury or non-luxury.”