Three in five travel agents believe customers’ buying habits have changed in the last year, while the state of the UK economy is deemed the most critical factor in the near future.
The results come from a Travel Weekly State of the Nation survey of 300 Advantage leisure and business travel agents questioned between August 22 and September 9, just days before XL Leisure Group collapsed.
The failure would probably not have changed the overall picture – the state of the UK economy would still have been the overwhelming factor for agents up and down the country. With 62% of leisure agents and 70% of business agents ranking it the most important issue of the next three to five years, it comes way above other concerns.
In second place, air travel is ranked the most important factor of the next few years by 14% of leisure agents and 13% of business agents.
The change in buying patterns over the last 12 months comes as little surprise as more consumers feel the pinch and look more carefully at how and what they spend. Agents have seen first hand the impact of the credit crunch on holiday bookings.
According to the survey, 41% of business agents said customers were now more cost-conscious and shopping around for cheaper deals, while 23% said clients were downgrading, for example, because of the economy, and 16% said customers were booking more online.
Within the leisure travel sector 27% said customers were booking later; 21% said clients wanted cheaper deals; and 20% cited online bookings as the way buying habits had changed.
In terms of consumer spending, leisure and business travel agents gave widely contrasting views. In total 45% of leisure agents said customers are spending more compared with last year, while 45% of business agents said customers were spending less.
But, at the time of being surveyed, more than half of both business and leisure agents believed consumer spending would increase in the next one to two years.
Whether this is a case of wishful thinking or false optimism in the light of recent events, only time will tell. But the optimism was translated across the sector with the survey showing 72% of agents either a little or very optimistic about the next year.
There is no way of knowing how positive agents feel since XL’s collapse but, as Advantage sales and marketing director Colin O’Neill points out, there are niche growth areas and, certainly in the leisure sector, holidaymakers are unlikely to give up their summer holiday.
“In terms of growth and spend increasing per trip, there are the long haul and cruise sectors,” he said.
Agents are well aware of this – 55% of leisure agents believe luxury business will grow significantly in the next three to five years and 46% believe cruise sales will do the same. These are closely followed by experience and niche holidays.
The fact holidaymakers no longer want just a beach holiday – cited by 67% of leisure agents as the most important trend significantly influencing the type of holidays taken – has been known for a while.
Much of the survey’s results will come as no surprise, but they demonstrate, using definitive data, exactly how much change agents are witnessing among the holiday-buying public and how they are reacting.
The very fact the majority of agents no longer see the web as a threat – 67% saw the internet as an opportunity, while 25% saw it as a threat – shows how far the trade has moved on.
Just five years ago the internet was seen as public enemy number one by most in the trade. As O’Neill puts it, agents seem to be taking a “mature” view on the internet.
But there are also some worrying signs. Six out of 10 agents (61%) would consider a new career outside travel and 64% believe there is a skills shortage in the industry.
With the state of the economy, now is not the best time to think of a career change, but industry chiefs worried about the bottom line have another more pressing issue – staff and hanging on to them.
