Agents warned of direct-sell threat

EX-MYTRAVEL boss Steve Endacott has warned high street travel agencies are under threat from the rapid growth of tour operators’ direct-sell businesses.

Endacott – who left MyTravel in September and plans to set up a new business – said the Internet was far less of a concern by comparison.

“We’re seeing the erosion of the high street, with the biggest threat to shops coming from operators selling direct.”

“If I was a retailer, I’d be looking at the direct channels as my main concern given that these businesses naturally grow each year.”

Endacott would not be drawn on the level of sales now coming from the big four’s direct-sell businesses, but sources claim it could be as high as 15%-20% of overall business as repeat customer levels increase each year. Many direct call centres are thought to have 40% repeat customer rates.

Many agents admit there is an increasing threat from operators whose products they sell.

Ilkeston Co-op Travel managing director Chris Smith said: “Business conducted through the retail environment is being eroded. The biggest threat is not the Lastminutes and Expedias of this world, but the operators themselves.”

He said it was up to retailers to convince operators it was pointless having good distribution and then “constantly trying to erode it”.

Midconsort chief executive Charles Eftichiou said: “Direct sell is our biggest problem. Retailers are becoming more aware of it and some of our relationships with the big companies are diminishing.”

But Advantage head of commercial Julia Lo Bue-Said suggested many operators were using the trade for the first time.

Meanwhile, Worldchoice commercial director Keith Wilson said the biggest threat was from homeworkers, who were able to discount more.

Operators said they were simply using a range of channels.

Thomas Cook director of trade relations Ian Derbyshire said: “We’re covering all distribution aspects. We still believe in the high street.”