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Travel Agents - UK - December 2012

INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Estimated number of overseas holidays booked via travel agents, 2007-17
Figure 2: Estimated number of domestic holidays booked via travel agents, 2007-17
Market factors
Weak pound weighs down overseas sector
Figure 3: Index of quarterly average exchange rates for Sterling, Q1 2007-Q3 2012
Tourist expenditure abroad posts signs of recovery
Figure 4: Seasonally adjusted UK tourist expenditure abroad vs. total household final consumption expenditure, Q2 2002-Q2 2012
Higher spending abroad mitigates impact of decline in overseas holidays
Inclusive holidays sustain the exotic, long-haul sector
Figure 5: Index of overseas holidays, by region, 2007-11
Domestic holiday market experiences shaky growth
Market share
Figure 6: Leading travel agents, by number of retail outlets*, October 2012
The consumer
One in four has booked a holiday using a travel agent
Figure 7: Use of travel agents in past two years, October 2012
Time saving and protection drop, but stay on top
Figure 8: Reasons for travel agent use, October 2012
Positive views of travel agents have fallen
Figure 9: Attitudes towards travel agents, October 2012
Misconceptions about protection fuel travel agent sales
Increased awareness about ATOL could be a double-edged sword
What we think
ISSUES IN THE MARKET
How will improved consumer awareness about protection affect agents?
How will VisitEngland’s proposed 2013 campaign affect agents?
How can agents compete against price comparison websites?
How can agents attract the lucrative senior demographic?
TREND APPLICATION
Premiumization and Indulgence
Guiding Choice
2015: Old Gold
MARKET DRIVERS
Key points
Industry calls for Flight Plus ATOL extension to airlines
ATOL extension to be widely advertised in £250,000 online campaign
Tensions rise as PTD reform deadline draws closer
Flight Plus to accelerate ABTA membership decline
Figure 10: ABTA membership, March 2011-March 2012
Figure 11: ABTA new membership, July 2011-September 2012
Operator failures continue, but decline in number year-on-year
Figure 12: ATOL tour operator failures/closures in the UK, October 2011-September 2012
Weak pound weighs down overseas sector
Figure 13: Index of quarterly average exchange rates for Sterling, Q1 2007-Q3 2012
Travel agents remain an key a source of research, despite internet threat
Figure 14: Research sources used for holidays/short breaks in the last 12 months, 2010-12
Figure 15: Research sources used for holidays/short breaks in the last 12 months, 2010-12
Tourist expenditure abroad posts signs of recovery
Figure 16: Seasonally adjusted UK tourist expenditure abroad vs. total household final consumption expenditure, Q2 2002-Q2 2012
Figure 17: Seasonally adjusted UK tourist expenditure abroad vs. total household final consumption expenditure, 2008-12
Higher spending abroad mitigates impact of decline in overseas holidays
Figure 18: Overseas holiday volume and value, 2007-11
Inclusive holidays sustain the exotic, long-haul sector
Figure 19: Overseas holidays, by region, 2007-11
Figure 20: Index of overseas holidays, by region, 2007-11
Domestic holiday market experiences shaky growth
Figure 21: Domestic holidays in Great Britain, volume and value, 2007-11
Travel agents fail to take a slice of the domestic market
Figure 22: Domestic holidays in Great Britain, by method booked, 2011
WHO'S INNOVATING?
Key points
Companies seek to profit from increasing smartphone penetration
Industry looks to emulate social networking models to promote sharing
Thomson to launch ‘shop of the future’
Virgin chases after post-Olympics goodwill
Thomas Cook moves to educate agents on differentiated products
MARKET SIZE AND FORECAST
Key points
Travel agent market down 13% over five-year period
Figure 23: Estimated number of holidays booked via travel agents, 2007-17
Figure 24: Estimated number of holidays booked via travel agents, 2007-17
Personal visits to travel agents continue to fall
Figure 25: Channel used to book holidays/short breaks in the last 12 months, 2010-12
Figure 26: Channel used to book holidays/short breaks in the last 12 months, 2010-12
Forecast methodology
Fan chart explanation
SEGMENT PERFORMANCE
Key points
Decline in overseas segment set to continue
Figure 27: Estimated number of overseas holidays booked via travel agents, 2007-17
Figure 28: Estimated number of overseas holidays booked via travel agents, 2007-17
Stronger domestic performance offers limited respite from overall decline
Figure 29: Estimated number of domestic holidays booked via travel agents, 2007-17
Figure 30: Estimated number of domestic holidays booked via travel agents, 2007-17
MARKET SHARE
Key points
Market dominated by post-merger Thomas Cook
Figure 31: Leading travel agents, by number of retail outlets*, October 2012
Thomas Cook slashes store portfolio but retains leading position
Advantage consortium expands through partnerships and acquisitions
Some firms pursue passive growth…
…while others aim for more aggressive expansion
COMPANIES AND PRODUCTS
Thomas Cook Group Plc
Background
Financial performance
Figure 32: Financial performance of Thomas Cook Group Plc, 2010-11
Figure 33: Financial performance of Thomas Cook Retail Limited, 2010-11
Recent activity
TUI Travel Plc
Background
Financial performance
Figure 34: Financial performance of TUI Travel Plc, 2010-11
Recent activity
Advantage Travel Centres Limited
Background
Financial performance
Figure 35: Financial performance of Advantage Travel Centres Limited, 2010-11
Recent activity
The Travel Network Group (Worldchoice UK Limited)
Background
Financial performance
Figure 36: Financial performance of Worldchoice Travel Limited, 2010-11
Figure 37: Financial performance of Worldchoice UK Limited, 2010-11
Figure 38: Financial performance of TTA (2007) Limited, 2010-11
Stella Travel Services UK (The Global Travel Group Limited)
Background
Financial performance
Figure 39: Financial performance of STS UK Holdco II Limited, 2010-11
Figure 40: Financial performance of Stella Global UK Limited, 2010-11
Figure 41: Financial performance of The Global Travel Group Limited, 2010-11
Recent activity
Flight Centre (UK) Limited
Background
Financial performance
Figure 42: Financial performance of Flight Centre (UK) Limited
Hays Travel Limited
Background
Financial performance
Figure 43: Financial performance of Hays Travel Limited, 2010-11
Recent activity
STA Travel Limited
Background
Financial performance
Figure 44: Financial performance of STA Travel Limited, 2010-11
Travel Counsellors Limited
Background
Financial performance
Figure 45: Financial performance of Travel Counsellors Limited, 2010-11
Recent activity
Virgin Holidays Limited
Background
Financial performance
Figure 46: Financial performance of Virgin Holidays Limited, 2011-12
Recent activity
BRAND RESEARCH
Brand map
Figure 47: Attitudes towards and usage of brands in the travel agent sector, September 2012
Correspondence analysis
Brand attitudes
Figure 48: Attitudes by travel agent brand, September 2012
Brand personality
Figure 49: Travel agent brand personality – macro image, September 2012
Figure 50: Travel agent brand personality – micro image, September 2012
Brand experience
Figure 51: Travel agent brand usage, September 2012
Figure 52: Satisfaction with various travel agent brands, September 2012
Figure 53: Consideration of travel agent brands, September 2012
Figure 54: Consumer perceptions of current travel agent brand performance, September 2012
Figure 55: Travel agent brand recommendation – Net Promoter Score, September 2012
Brand index
Figure 56: Travel agent brand index, September 2012
Figure 57: Travel agent brand index vs. recommendation, September 2012
Target group analysis
Figure 58: Target groups, September 2012
Figure 59: Travel agent brand usage, by target groups, September 2012
Group One – Conformists
Group Two – Simply the best
Group Three – Shelf stalkers
Group Four – Habitual shoppers
Group Five – Individualists
TRAVEL AGENT USE
Key points
One in four has booked a holiday using a travel agent
Figure 60: Use of travel agents in past two years, October 2012
Usage down against 2010 peak
Almost one in ten still visits an agent for non-booking use…
… but many are wary of pushy sales personnel
Usage lowest among financially significant 55-64 demographic
Figure 61: Travel agent use, by demographics, October 2012
Figure 62: UK resident’s holidays abroad, Apr-Jun 2012
ABs offer largest unexploited resource
Figure 63: Travel agent use, by socio-economic group, October 2012
Presence of young children dampens usage
Figure 64: Travel agent use, by presence of children, October 2012
REASONS FOR TRAVEL AGENT USE
Key points
Time saving and protection drop, but stay on top
Figure 65: Reasons for travel agent use, October 2012
Desire for protection highest among middle aged
Figure 66: Reasons for travel agent use, by age, October 2012
Motivation to save money decreases by lifestage
Figure 67: Reasons for travel agent use, by lifestage, October 2012
A third of ABs are satisfied and would book again
Figure 68: Reasons for travel agent use, by socio-economic group, October 2012
Long-haul travellers seek value and expertise
Figure 69: Reasons for travel agent use, by use of travel agents in past two years, any booking and package bookings, October 2012
Flight-only holidaymakers use agents to save time
Figure 70: Reasons for travel agent use, by use of travel agents in past two years, non-package/non-booking use, October 2012
ATTITUDES TOWARDS TRAVEL AGENTS
Key points
Positive views of travel agents have fallen
Figure 71: Attitudes towards travel agents, October 2012
Over 65s most likely to view agents as most convenient option
Figure 72: Selected attitudes towards travel agents, by age group, October 2012
Misconceptions about protection fuel travel agent sales
Figure 73: Attitudes towards travel agents, by reasons for travel agent use, October 2012
Increased awareness about ATOL could be a double-edged sword
APPENDIX – MARKET DRIVERS
Figure 74: Research sources used for holidays/short breaks in the last 12 months, 2010-12
Figure 75: Research sources used for holidays/short breaks in the last 12 months, 2010-12
APPENDIX – MARKET SIZE AND FORECAST
Figure 76: Channel used to book holidays/short breaks in the last 12 months, 2010-12
Figure 77: Channel used to book holidays/short breaks in the last 12 months, 2010-12
Figure 78: Channel used to book holidays/short breaks in the last 12 months, 2010-12
Figure 79: Channel used to book holidays/short breaks in the last 12 months, 2010-12
Figure 80: Estimated number of holidays booked via travel agents, 2007-17
Figure 81: Estimated number of overseas holidays booked via travel agents, 2007-17
Figure 82: Estimated number of domestic holidays booked via travel agents, 2007-17
APPENDIX – BRAND RESEARCH
Figure 83: Brand usage, September 2012
Figure 84: Brand commitment, September 2012
Figure 85: Brand momentum, September 2012
Figure 86: Brand diversity, September 2012
Figure 87: Brand satisfaction, September 2012
Figure 88: Brand recommendation, September 2012
Figure 89: Brand attitude, September 2012
Figure 90: Brand image – Macro image, September 2012
Figure 91: Brand image – Micro image, September 2012
Figure 92: Profile of target groups, by demographics, September 2012
Figure 93: Psychographic segmentation by target groups, September 2012
Figure 94: Brand usage, by target groups, September 2012
Brand index
Figure 95: Brand index, September 2012
APPENDIX – TRAVEL AGENT USE
Figure 96: Most popular travel agent use, by demographics, October 2012
Figure 97: Next most popular travel agent use, by demographics, October 2012
Figure 98: Other travel agent use, by demographics, October 2012
APPENDIX – REASONS FOR TRAVEL AGENT USE
Figure 99: Reasons for travel agent use, by demographics, October 2012
APPENDIX – ATTITUDES TOWARDS TRAVEL AGENTS
Figure 100: Most popular attitudes towards travel agents, by demographics, October 2012
Figure 101: Next most popular attitudes towards travel agents, by demographics, October 2012

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