Travel businesses need to improve customer service and management skills in the face of rising competition and challenging trading conditions, a new report concludes.

The economic squeeze is taking its toll with the number of companies operating falling by 3% over the past year, according to the study by government training body People 1st.

The report says this reflects a “worrying” downward spiral over the past five years which has seen a 35% reduction in travel agency managers and travel agents (7%). The organisation’s chief executive Brian Wisdom said: “As the report indicates, this is not the time to cut back on training.

“The critical challenge for the industry now is to tackle the managerial skills deficit given the sheer fall of travel agency managers over the past few years.” 

Wisdom added: “One route promoted by People 1st is apprenticeships. These provide businesses with the opportunity to grow and mould tomorrow’s leaders and indeed, larger travel employers increasingly recognise the business benefits.

“We are currently looking at how the apprenticeship model can be adapted to the needs of smaller businesses so they too can reap major returns.”
People 1st policy and research director Martin-Christian Kent said: “We are now experiencing the impact of so many managers going quickly. Over the past four years, the number of employers who have reported that their managers do not have the necessary skills has shot up by 9% to 39%.

“A lot of experienced managers have left the industry in recent years so it’s critical that existing managers have the necessary skills to steer their businesses through these turbulent times.”

The ‘State of the Nation’ report into the jobs market for hospitality, leisure, travel and tourism found that:

•     Travel businesses report that staff lack the necessary customer handling skills, another essential skill required for surviving the economic downturn.  People 1st aims to train 200,000 people ahead of the 2012 London Olympic and Paralympic Games.

•     A 42% drop in travel employers who provide training for staff.

•     39% of employers with skills gaps report that their managers do not possess the required skills – a significant increase of nine percent since 2007. 

•     Tourism is one of the UK’s highest and best performing export earners and is forecast by Deloitte to have above average growth of 3.5 percent GVA per year until 2020. Despite economic difficulties, the sector’s proportional contribution to the UK’s economy has increased from 4.5% to 4.9%, accounting for £42,248 million.  

•     Travel services is one of the most profitable with each employee generating £102.74 per hour worked.

•     The sector is attractive for business start-ups – 21,580 in 2009. But few businesses are taking advantage of what is available. More than half (56%) of small businesses did not receive any support before setting up their company while 41% felt that their business would have benefited from some advice, mainly around finance.

•    The size of the workforce has increased over the past year to 2.1 million – one in 14 UK jobs and 7.2% of the total working population.