Travel agencies – can they survive?

Thomas Cook aircraft parked up at airport gate at night

The sad demise of British travel agency Thomas Cook, the world’s oldest travel company, in 2019 showed that in the cut-throat world of high street retail, nothing is sacred.

Callers Pegasus travel agency balloon

When I first started travelling in the 1970s, everyone made their bookings through travel agents. It was the exciting first step to turning a dream into reality.

Their offices were rather swanky. I used to go to one called Callers-Pegasus in my home city, Newcastle Upon Tyne in the UK. It was a rather out-of-comfort-zone experience for me in those days. The assistants were lofty, smart and glamorous, like flight attendants, with immaculate make-up and gleaming name badges. There were long racks of tempting brochures to keep me amused while I waited, and waited, to be seen.

The good old days

By the 1980s, when people were travelling further afield, lots of specialist operators had joined the line-up. They knew all about ski holidays, rail journeys, canal boats, safaris and trekking. Then there were the destination specialists – Latin America, Spain, Italy, North America – whatever I wanted, there would be a travel agent specialising in it.

There were also these wonderful agencies known as ‘bucket shops’ which sold unfilled airline seats at bargain prices. This was a godsend to students like me, who could pick up a ticket to Madrid or Paris for next to nothing.

The cool dudes

By the 1990s I had graduated to long-haul and was looking for New Zealand and Australia specialists. I found Travelbag in London’s Strand, and Trailfinders in Kensington (both still operating). These were rather different places from Callers-Pegasus. They were full of cool, casually-dressed young assistants who looked as though they had just stepped off a surfboard or a backpacker bus.

I still had to wait a long time, but meanwhile I was offered a free coffee and the latest company travel magazine, and directed to enjoy them on a beanbag or fashionably scarred leather sofa. This was an early example of companies grasping the value of what is now termed ‘user experience’, or UX – and I loved it.

The best days of all

So it seemed that while travel habits were changing, the industry was responding and keeping pace. Callers-Pegasus even expanded into other towns. They, Thomas Cook and all the other high street agents were doing just fine, alongside the upstart specialists. More people than ever were travelling, and most of them, including me, were using agents.

I appreciated their superior knowledge – they knew stuff because they had either been to my destination many times, or had managed so many bookings that they had become familiar with all the nuances that can turn a mediocre trip into a great one. They also had access to agent-only deals, which was a great incentive to use them.

Falling from grace – millennium

Travel agency office

It was in the new millennium that the pace of change started to speed up, and technological advances brought the ‘direct to consumer’ disruptors to the industry. In that first decade, I probably used a travel agent once or twice only.

One of those occasions was here in New Zealand, when I decided to give a local travel agent a fair go, to find out what added value was on offer nowadays. This was a high street agent more like the Callers-Pegasus of old than the cool specialists, but they were professional and helpful.

I booked a flight to the UK through them, which I could have easily done myself online. The main advantage was that, just as in the UK, booking with an agent offered the added protection of government-backed travel assurance schemes. But this came at a price – I was startled to be charged a $60 ‘service fee’. That was the last time I used an agent.

D.I.Y. travel

Today, I do absolutely everything online. If I don’t have the necessary knowledge, I borrow guide books from the library, check reviews on TripAdvisor, ask someone in a Facebook group or search Google. I fly with decent airlines which have clear policies for delays and cancellations, and when these things happen, I manage the fallout myself. I buy travel insurance to cover worse case scenarios.

Would I bother using an agent again? Yes, if I wanted to do something that required specialist knowledge, or if I were simply too busy to do all my own arranging. But for everyday flights and hotel bookings, no.

What next?

Back to my opening question. What changes will the next decade bring? Commentators have been predicting the demise of the travel agent for long enough – will it happen? Callers-Pegasus disappeared from high streets in 2015. Almost 700 travel companies went out of business in the UK in 2017 alone.

Research commissioned by BBC Radio 4 in late 2018 showed that, of 2584 travel agents assessed, 25% had assets of £25,000 or less. The researchers’ liquidation specialist said that this financial vulnerability put them at high risk of being out of business by 2024 – a conclusion firmly rebutted by the Association of British Travel Agents. Heads in the soft, sun-kissed white sand, perhaps?

Igtham Mote castle and moat, England

Build a moat

I recently listened to a talk by American stock market expert Phil Town, who said that successful companies need a ‘moat’ if they are to survive. A ‘moat’ is a unique selling point; an offering that competitors might imitate but can never fully replace.

Apple, for example, has its operating system, which is its moat. Other companies like Google have operating systems too, but dedicated Apple users are likely to stick with what they know and love, and continue to buy Apple products which can only be used on Apple operating systems. I thought this was a perceptive comment. What kind of moat could a travel agency create?

The survivors

Selfridges store London

I do see a future for corporate travel and specialist niche operators, provided that they are not only responsive to customers, but proactively scanning the horizon for the direction of travel, and leading the way forward. Sustainability and environmental awareness are clear priorities for today’s travellers, and the most successful providers are already innovating in this area.

I do feel sorry for companies like Thomas Cook. Heritage and history can be both a blessing and a curse, as I’ve discovered in some of the organisations in which I’ve worked.  Change can be hard to implement.

One of the companies I most admire for successfully combining tradition and innovation is Selfridges, the London department store. They have taken UX to a new level, while celebrating their history at the same time.

My prediction, therefore, is that the ‘generic’ high street agents will eventually disappear. For others, green credentials and great UX will be essential. People still love free coffee and comfy sofas. Throw in a brownie and I’m sold.

update 2021

The original company may have disappeared, but the name has not. Thomas Cook’s brand and name have been purchased by Fosun Tourism Group, the owners of Club Med. They operate the new Thomas Cook as an online-only travel business. I understand that the purchase was encouraged by former employees of Thomas Cook who wanted to ensure that the legacy of Thomas Cook would ‘find a new life’. Here’s wishing them every success.

© Coconut Lands. Not to be reproduced without permission.


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3 Comments

  1. This brought back memories of excitement of visiting our local Thomas Cook and grabbing travel brochures, rushing home to look through them and circling all the hotels I wanted to stay at. I’ve booked so many holiday packages through them.

    I also used Travelbag when I first booked flights to Australia.

    Now I do everything myself online. I’ve tried local travel agents but they just can’t beat the price I can get direct or through an on-line agent.

  2. Wonderful post – I too am sad about TC – but I suppose to an extent it was inevitable. I have always preferred where possible to put together my own holidays, but I agree with you that environmental issues are vital to the future of travel agencies/operators and freebies are definitely a sell. Financial uncertainty is also a massive issue, not helped by Brexit fears.

    1. Thanks so much Yaya for your kind feedback. Totally agree with you about Brexit. Really hoping that a deal can be struck as the uncertainty isn’t helping anyone.

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