STA Travel was struggling “long before Covid”, according to a legal advisor to the company.
The travel agency and tour operator ceased trading on Friday, with about 500 jobs lost as a result of the failure.
“An awful lot of their business was still student gap years,” said Alan Bowen of the Association of Atol Companies, of which STA was a member.
“Of course that’s disappeared this year but increasingly students haven’t got the money anymore with the fees they pay. The reality is that STA was in difficulties long before Covid-19 and was already looking at cutting costs.”
Bowen said STA’s latest accounts, for 2018, showed “decent profits” but noted that “head office had seen last year things haven’t grown in the youth market”. Bowen added: “That’s not just students, that’s the whole 18-30 market. You can see that from when the Club 18-30 brand was retired.
“There used to be a number of student operators, but then students don’t have the same levels of disposable income as they had previously given the amount they pay in fees and the debt they come out of university with.”
He added that while STA sold other youth operators, it hadn’t managed to pivot to a young professional market as they had because it was so well-known for student travel.
“They [STA] were selling adventure holidays, but I’m not sure there were lots of people booking them,” said Bowen. “I suspect the actual number of bookings is rather smaller than anybody would’ve liked. It’s not likely to have a huge impact on other operators. That was the problem. Airlines may lose out as they still had a substantial flight-only business, but the CAA will protect those and there might not be very much outstanding this year as long-haul air travel isn’t happening.
“They were looking at offering Airbnb properties, so they were moving with the times, but it was a question of trying to get the consumer to understand that they offered more than student travel.
Its high street presence of 49 shops in the UK was also likely to be “expensive”, said Bowen. “The majority of young people book online, which probably didn’t help if they had substantial lease obligations,” he added. “The cost of the space on the high street is expensive, and they were looking to cut costs.”
‘STA Travel inspired my career’
Industry professionals have paid tribute to STA Travel as a brand that inspired them to take their first trips and forge careers in travel.
G Adventures’ marketing director Ant Stone joined STA after backpacking and said he learnt “a lifetime of lessons” in nearly seven years at the company.
“I learned to ask for forgiveness, not for permission; to always know my numbers; to challenge, no matter how senior; to respect, now matter how junior. I learned nothing ‘just works out’,” he said.
“I learned to believe in myself, and to trust in others. I learned that ‘jumping in at the deep end’ was a thrill I can’t give up. I have never laughed so much or been prouder of more. There was no department bigger than the next, and no individual bigger than the brand.”
Amadeus’ head of retail customer solutions Clare De Bono started her travel career at STA. “I learned something new every day, built a career alongside the strongest and most dynamic people, and travelled the world – every continent, even Antarctica,” she said.
“Values are important and at STA Travel we shared them in spades: exploration, adventure, discovery and a belief that travel changes people’s lives for the better. Long hours and hard work, but always with people that had your back and a sense of fun.”
Heather Colbourn, senior sales manager at AAT Kings, booked a round-the-world trip with STA in 2006. She said: “I was amazed at how knowledgeable the staff were and it led me into a career in travel after I returned. It is a very sad day and my heart goes out to all the staff affected.”
Zina Bencheikh, EMEA managing director at Intrepid Travel, was “saddened” to hear of STA’s demise. She said: “STA shared many of Intrepid’s values, not least our passion for travel that makes a difference. Not only were they a valued partner of Intrepid, over the years STA played an important role in making travel accessible for young people who wanted to see the world, and they’ll be sadly missed.”
