Trade-only supplier says strong long-haul sales this year and last shows the resilience of independent agents. Lee Hayhurst reports
A 21% increase in the value of sales by long-haul specialist Travel 2 last year demonstrated the resilience of independent travel agencies, according to
the trade‑only supplier.
Speaking to Travel Weekly after the Glasgow-based specialist’s year-end in June, managing director Andy Freeth said agents did £29 million more business with it than in the previous year.
Key to that growth was a 38% increase in the value of sales of holidays, a sector Travel 2 has been pushing as it seeks to establish itself as a major operator trade partner as well as a provider of consolidated air fares and other product.
Staff in Travel 2’s call centre have been able to concentrate on more lucrative and complex bookings as flight-only sales become increasingly automated.
Street life
Sales of holidays – which Travel 2 classifies as a flight plus five or more nights’ hotel accommodation – outperformed other areas of business. Air-only sales grew 16% in total transaction value (TTV).
Freeth said although travel agencies on the high street had reduced in recent years, Travel 2 had grown its business and any decline had levelled off.
“In 2005, Abta recorded 7,800 outlets; in 2010, there was 5,900, a drop of 1,900, of which 700 were due to consolidation by the big four operators,” he said.
“I’ve not got stats on the last three years, but the decline has not been anywhere near as dramatic and we see our partners investing in the high street, buying shops and seeing opportunities.”
Long-haul growth
Freeth said Travel 2’s growth led to an additional £1 million annual profit for the company, which is part of the Stella Travel Services group, along with agency consortium Global Travel Group.
“We have seen an increase in investment from our partners wanting to get to independent agents,” Freeth said. “It’s great to be able to give tourist boards and hotels that return on investment.”
This year’s growth came on the back of an impressive 70% holidays TTV upturn the year before. Freeth said Travel 2 was gaining market share as agents turned to long-haul to secure customer loyalty.
“We are definitely seeing a larger chunk of business from high street agents, from independents and larger homeworkers. Consortia are in massive growth,” he said.
“Independent agents over the last few years have recognised the need to upskill and improve their knowledge on long-haul destinations.
“We are on the front foot, but we do not expect business to come to us. We work very hard for it, with eight guys in the field, and we pick up new business every year.
“Not every campaign works but we will always do a postmortem on why and be open and honest.
“As a result our airline, hotel and tourist board partners have recognised us as a front-runner when it comes to getting them in front of independent agents.”
New business pays
Travel 2 said it had £5.2 million
of business in the last financial year from agencies that made no sales with it the previous year.
Gordon McCreadie, the operator’s sales marketing and commercial director, said: “Agents are realising they can add more value and retain customers better in long-haul than in short-haul.
“Customers are less likely to shop online and piece it together themselves. Knitting together complex itineraries will never be made particularly easy via technology.
“With the amount of product with no-frills carriers in short-haul they are finding there is less they can sell where they are not competing directly with airlines.”
One of the ways Travel 2 has looked to improve its offering to the trade has been to contract its own product rather than going through third-party destination management organisations.
The operator is using new XML technology to achieve this. The result is a faster, more flexible trade offering, enabling Travel 2 to work more directly with hotels, managing their own best available rates and tactical deals.
Freeth said he did not envisage going direct in all destinations, but Travel 2 is keen for suppliers to do more of the work managing the inventory from their end.
Travel 2, which has been operating for 30 years, has an Atol licence to carry 123,208 for the year to March 2014. It employs 233 people at its base in Glasgow.