Lawyers and industry bosses attended a filming day ahead of next week’s event. Lee Hayhurst reports
Barclays Travel Forum: ‘High street is challenging but specialists can thrive’
Industry experts assess outlook for travel retail ahead of next week’s Barclays Travel Forum. Lee Hayhurst reports
High street travel agents are not expected to be immune from the challenges being experienced by other retail sectors, according to experts lined up for this year’s Barclays Travel Forum.
The annual conference will focus on the economy and the travel sector’s prospects, and organisers invited industry bosses to Barclays’ HQ in Canary Wharf to record their views on video ahead of next week’s event.
They were asked about the future of the high street following a slew of poor sales and footfall data for retailers in the first quarter of 2018.
This has seen recent high-profile collapses of retailers such as Toys R Us and Maplin, and reports of problems at House of Fraser, Debenhams and restaurant chains including Jamie’s Italian.
Martin Alcock, director of The Travel Trade Consultancy, said: “The high street has got a lot of challenges. Look at retail in general: there have been lots of profits warnings.”
Alcock said travel had parallels with the restaurant sector, which has seen “untrammelled growth” in recent years, attracting a lot of investment from private equity.
“What we’re left with, as a result, is a high street full of mediocrity with lots to choose from but nothing that’s that different from everything else,” he said. “Firms are paying down debt and only making money if they generate bigger cashflows.”
Alcock pointed out that consumer data has also shown a drop in e-commerce spending, and he saw a future for high street retailers that offer quality advice and service.
Paul Carter, chief executive of Inghams parent Hotelplan UK, agreed. He said: “The high street is having a tough time – we’ve seen many shop closures and online taking a lot of that share.
“But I still see a big opportunity for agents to sell differentiated holidays that are more specialised and harder to sell, serve and book online. The way I see it as an operator is that a consumer goes to a travel agent for choice and advice. It’s important to offer choice.”
Hotelplan’s escorted adventure tour specialist, Explore Worldwide, is joining industry body the Association of Touring & Adventure Suppliers, believing agents can help grow that sector as they have done in cruise.
Nicky Spoor, head of tax at accountancy firm White Hart Associates, predicted the high street will evolve as retailers work together to offer a more diverse and entertaining shopping experience.
But she said the gulf between affluent and non-affluent areas will widen. “The high street, as we historically know it, I do not think is going to exist.”
Jaymin Borkhatria, sales director at Southall Travel, said: “There is a future for the high street, especially for firms selling complex itineraries and package holidays, but online and over the phone will take more share.”
Nick Cooper, director of Villa Plus, said: “It’s going to be very challenging for high street leisure agents. I don’t see why anyone needs to go to the high street. They may go to get advice, but will they book?”
Olly Brendon, chief executive of ATD Travel Services, said: “I don’t know a single person who has been in a high street agency; however, the evidence suggests the good ones are thriving.”
Brendon said to prosper, high street agents needed a diverse strategy including e-commerce and call centre channels.
Lawyer brands CAA’s Atol proposals a ‘power grab’
Proposals to reform how the Civil Aviation Authority regulates package holiday sales are a “power grab”, according to a leading industry lawyer.
Stephen Mason, senior partner at Travlaw, said “It’s almost not like they [the CAA] want to regulate the industry, it’s like they want to run the industry”.
A consultation on changes to agency terms that will be brought in under the new EU Package Travel Directive ended last week.
They include changes not required under the PTD that will increase CAA scrutiny and give it new civil sanctions including fines that can be imposed on Atol‑holders.
Mason listed a number of areas he was concerned about which he said will place greater burdens on Atol-holders and increase red tape.
These included a new requirement for firms to name the airline in advertising and report any material changes in their businesses, and small Atol-holders to report more frequently.
Mason also questioned why there needs to be three types of Atol Certificate, with Flight-Plus becoming a Package Holiday Multiple Contract despite offering the same protection as a package.
“Why make it difficult for consumers? They just want to know if they have bought a package or not,” he said.
Mason said there were lots of positives in the reforms, including a clearer definition of what is a package.
But he added: “They have slipped all this other stuff in to the package travel reform when it’s nothing to do with the PTD. I hope lots of firms and organisations have raised objections.”
New package rules ‘lower barriers to overseas markets’
Experts agreed that one of the main opportunities of the latest reform of package travel laws in Europe is for firms looking to break into overseas markets.
The new Package Travel Directive means travel firms will be able to trade in other European Economic Area countries under regulations of the country where they are based.
Martin Alcock, director of The Travel Trade Consultancy, said the barriers to entry for UK firms looking to grow in international markets will be “significantly lowered”.
“For the first time there will be a really easy way to dip your toes into European markets without having all the costs of establishing businesses there,” he said.
Although there are opportunities in the latest reforms, Alcock warned the sector feels “browbeaten” by continual regulatory change, meaning firms have become more “reactive”.
“They feel they are permanently in a state of regulatory flux,” he said.
Nikki Spoor, head of tax at White Hart Associates, said firms were struggling to prepare for the new PTD and EU GDPR data rules amid a lack of clarity and legal advice.
Travel bosses tip a decent year but lates to be tricky
Industry bosses predicted 2018 will be a good year for travel as consumers continue to travel despite economic and political uncertainty.
Paul Carter, chief executive of Inghams parent Hotelplan UK, said the firm had enjoyed a good winter after the best snowfall in the Alps for 40 years, although too much snow had been a problem at times.
And he was optimistic about the overall prospects for the sector.
“It will be a decent year,” he said. “Holidays are things that people want to take.”
Carter said he expects Brexit to have an impact if flying becomes more difficult and costs have been pushed up due to the weak pound.
Nick Cooper, director of online operator Villa Plus, said it was “already virtually sold out” for summer 2018 and yields had been “acceptable”.
However, he said firms that rely on the lates market could struggle.
“I think it will be quite a good year but the late-booking market will be even more challenging than previous years,” he said. “The big question is, have you got enough bookings in now so you don’t need to discount in the lates?”
Olly Brendon, chief executive of ATD Travel Services, said he expected 2018 to be largely in line with 2017, which was a good year.
He added the tickets specialist was seeing strong sales for Florida, which was a good “litmus test” for the sector as a whole.
However, the Travel Trade Consultancy’s Alcock felt this year could be tough for travel firms.
“In the first quarter we have seen a real challenge across the retail sector and I think travel will feel its share of that,” he said.
Hindle: Brands should have ‘higher purpose’
All brands must think about their “higher purpose” beyond just being transactional, according to the boss of a leading travel public relations firm.
Debbie Hindle, managing director of Four Travel, said it is particularly important to have a “purpose” in the digital age as consumers have the ability to share their views about brands.
“Once you understand your purpose, it becomes your story,” she said, “And in the digital space you can carry that across everything you do.
“What makes a great brand is purpose; it cannot just be a transactional brand that says ‘come and buy my products’.”
Hindle (pictured) said it was equally important to have a purpose for staff so that they know they are working to achieve something that delivers value to the customer.
Digital channels and social media also offer brands insight into customers, such as who is the most influential and the most unhappy, so problems can be addressed directly and with transparency and integrity.
But Hindle said many brands believe they understand sentiment by conducting traditional market research and have no idea what people are really saying about them.
She said: “Look at what people are generally saying, rather than what they say when they fill out forms. If you understand that, you understand what they respond to and what they see as negative and positive.”
About the forum
This year’s event will be the 13th annual Barclays Travel Forum.
Around 325 travel industry bosses and senior managers will attend the half-day event at the British Museum in London on May 9.
The forum is organised by Chris Lee, head of travel and professional sports at Barclays Corporate Banking.
Lee said the agenda reflects some of the big issues facing travel firms including the raft of new legislation such as GDPR data rules, the new
Package Travel Directive and the Payments Services Directive 2.
“With all of the stuff coming in this year we felt we had to have a section on regulation; it’s a big topic for the industry in 2018,” he said.
“The event will start with our usual global economic update that will set the scene for some of the sessions that follow.”
This year’s forum will focus on four main areas: the economy, regulatory changes, niche holidays, and brand and reputation.
Speakers
• Nick Ferrari, broadcaster, LBC radio
• Richard Moriarty, chief executive, Civil Aviation Authority
• Richard Masters, managing director, The Premier League
• Fiona Hathorn, managing director, Women on Boards UK
• Graham Pickett, senior partner, Deloitte
• Anni Hood, founder and managing director, Well Business Solutions
• Lucia Rowe, head of UK and Ireland, A-Rosa River Cruises
• Brian Young, managing director EMEA, G Adventures
• Steve Dunne, chief executive, Digital Drums