THEBUSINESStravel industry is set for a period of major consolidation in 1999, according to some of the key players.
They say the industry will follow the retail sector, which saw significant changes in 1998.
P&OTravel managing director Tony Hughes said consolidation would be driven by the need for agents to keep costs to a minimum as they cope with airline commission cuts and the economic downturn.
“There is going to be no room for the small business travel agent,” he said.
“It’s going to be tough. Airlines will reduce commission but there will still be arrangements with good quality, key players.”.
The Travel Company chairman and managing director David Whittaker said he expected to see a number of acquisitions by the six largest UK agencies, excluding the three multiples.
Portman Travel has publicly announced its plans to strengthen its national networkthough acquisition this year (Travel Weekly November 11).
Managing director Graham Flack said there were currently around five smaller players who were actively looking to sell.
But he said potential buyers were waiting to see if there would be further airline commission cuts in April before making acquisitions. “The ideal company to buy would be one which has moved over to management fee,” said Flack.
Britannic Travel managing director Alan Spence said he expected to see a number of mergers among the regional players.
There is speculation that Britannic will be the main target for Germany agency Hapag Lloyd, which wants to strengthen its position in the UK.