Times are changing on the high street. As belts are tightened, travel agents can no longer rely on their shop windows to bring in the business they need to survive.
The story is hardly a new one. Agents have been developing other sales channels, mainly online, for years, and many are working on sophisticated customer relationship management systems to target customers effectively.
But most stories about change on the high street have focused on the independent sector. Simultaneously, multiples have been accused of closing high-street shops as they consolidate networks and standing still on customer service and product knowledge.
Even independent agents, who years ago considered their high-street neighbours Going Places, Thomson, First Choice and Thomas Cook as arch rivals, now admit they are more likely to worry about online competition than what’s happening two doors down.
But could this change? TUI Travel managing director UK and Ireland Dermot Blastland thinks it can. Announcing a board shake-up last week, Blastland said new head of distribution Nick Longman will be responsible for changing the role of the group’s 5,379 Thomson and First Choice agents.
Service centres
This means broadening the remit of high-street agencies, effectively turning them into mini-service centres for their shops’ postcode areas. In future they will get involved in, and be rewarded for, sales traditionally out of bounds to them.
This should give agents the chance to upsell extras or offer extra advice to customers who have booked online or through the call centres rather than through their shop. Equally, staff that spend time with customers only for the customer to book online will be rewarded for their work.
Blastland said: “It’s about when someone comes into the shop and the agent spends a couple of hours with him or her, who then goes home and books online. We are saying we will recognise that; business generated in the postcode will be credited to the shop.
“We are redefining what the shop staff are there for,” added Blastland, who stressed the company hopes to improve customer service levels among shop staff and increase revenues across the shop network.
The details of this new way of working, which is likely to mean customers booking online are directed to their local agent for more advice or booking alterations, and how staff will be rewarded, have yet to be hammered out. “Nick will be looking at how to credit shops,” said Blastland.
There are wider implications, too, that need to be addressed: what does this mean for the company’s call centre staff and how will the company prevent over-eager sales consultants “pestering” online customers for extra bookings?
One thing is certain: the quiet days when shoppers are thin on the ground may be over. Agents’ time will instead be maximised to earn more revenue.
Already, Thomson’s virtual call centre – which routes calls around a portion of its Thomson shop network – has allowed agents to sell holidays during quieter hours. This system is likely to be rolled out to First Choice shops, a spokeswoman confirmed.
Sensible approach
Put all these elements together with TUI Travel’s decision to focus on customer service and it would appear the multiples are taking a sensible approach on how to use their sales forces more effectively. But does this make them more of a threat to independent travel agents’ survival?
Bailey’s Travel owner Chris Bailey said independents cannot be complacent, and admitted there is a danger in believing independents are streets ahead of the multiples.
“Don’t overestimate the quality of the independent sector. We are only just developing customer management programmes as getting to grips with technology has been an issue. We are developing our CRM in recognition that you cannot rely on people coming through the door.”
But ask Bailey if he is concerned about TUI Travel’s efforts to improve the way its staff operate regarding his own business and the answer is “no”. “There are independent agents doing a fabulous job on CRM and we are not there yet.
“But there are a lot of independents doing a worse job. They will be at risk if Thomson gets a grip on this.”
He predicted half the high-street agencies will disappear over the next decade. “Of that 50%, I think 10% will be the big boys consolidating into fewer outlets. Overheads are going up and online companies are doing a good job,” he said.
This is a prediction dismissed by TUI Travel and Thomas Cook, which claim there are no plans to reduce the size of the shop networks.
Thomas Cook chief executive Manny Fontenla-Novoa said at its trading update last week: “We have no plans to change the size and shape of our UK retail network and we see this as a major strength to Thomas Cook.”
Challenging times
Independent consortia on the high street maintained multiples remained a force and agreed agents have to change because of a fall in high-street footfall and challenging trading conditions.
Advantage sales and marketing director Colin O’Neill said: “Agents have to look at other ways to attract customers. Some independents have customers who have moved house but stayed loyal to the agent.”
There remain benefits for smaller businesses over large “faceless” companies, he said. “The multiples can match us in some instances but would a multiple agent be prepared to deliver tickets to a customer’s home? Some of our members think nothing of this because it’s their livelihoods. How do multiples put a policy in place and make it look natural?”
Independent agents increasingly view their rivals as online companies rather than bricks-and-mortar shops, he stressed. “There is less talk about how we compete with Thomas Cook. The multiples are less significant.”
Despite this, only 60% of Advantage agents have a degree of bookability, which means 40% remain reliant on walk-in and phone trade. To this end, Advantage is to relaunch its central website, which can be white-labelled by agents.
Customer service
While Advantage prides itself on the level of specialist knowledge offered by members, O’Neill argued customer service remained the key factor in winning new business and retaining customers.
“The key is getting customers to come to you in the first place. You have to be professional, technologically savvy and personable. It has to be natural and consistent and you cannot get great service in 30 seconds.”
The shift to a multi-channel sales approach is unlikely to happen overnight for the multiples and could be hampered by a heavy focus on in-house product.
Ellie Doherty, managing director of Miss Ellies World Travel in Manchester, warned that converting sales of savvy online bookers can be tougher than securing bookings from walk-in customers.
“People who have booked online are a different breed of customer and tend to have looked around more and know how much they want to pay. They can be difficult to convert unless you can offer an independent choice of holiday and knowledgeable advice.”
For independents used to selling dynamic packages, this allows flexibility not always available through the multiples, added Doherty. “We save customers hundreds of pounds and offer flexibility. Multiples are only used to dynamically packaging their own products.”
Meanwhile, Bailey believes the multiples will struggle to change, not least because their workforce is ill-equipped. “They are desperate – their high-street model is up the creek without a paddle. They are doing everything they can to change that,” he said.