‘1,800 agencies to shut’

ABTA Convention special report: The rise of the internet will result in a third of UK travel agencies closing in the next decade – and the writing is on the wall for commissions.

The double whammy warning came from ex-TUI UK boss Chris Mottershead, now chief executive of Travelzest. His comments follow the announcement that his former company is cutting commission to 7% from January 1.

He told delegates that unless agents embrace the internet and make “radical changes”, numbers will drop from just over 6,000 now to 4,200.

He said: “If you’re not on the internet now you really have to ask yourself what century you are in.

“Thirty per cent of your business should be coming via the web. Customers rightly expect to be able to deal with you on the internet – whether to find you in the first place, whether to research your offers or whether to make a booking.”

Mottershead, formerly responsible for leading multiple Lunn Poly (now Thomson), claimed that unless agents have some sort of specialism customers won’t bother to find them.

“You will never compete with the marketing budgets of Expedia and lastminute.com. You don’t have to become a specialist but be something that makes you special.

“Make it golf, culinary trips, a particular country, an actibity, an age group or special interest. Customers won’t be able to find you otherwise.”

ABTA president Martin Wellings agreed that companies needed to specialise, but denied a third of shops would shut.

“The business travel agents do will become more specialist and they must get their act together and offer more professional advice,” said Wellings. 

Mottershead added that the rise in different sales channels meant the writing was on the wall for commissions.

“The market is moving and you have to realise that you can’t hang on to your sacred cows. Don’t moan about the reduction in commission – get out there and offer customers something that they are prepared to pay you for,” said Mottershead.

He also predicted that all agents will have to take on some tour operating due to a blurring of the lines between the two sectors.

“Customers expect you to do something for them – so organise their holiday for them,” he said. “To do that effectively now you will have to take on the job of being a tour operator.”

Growing overseas property ownership should be an opportunity for agents but only if they can offer expertise in an area, according to Mottershead.

“If you understand and have a thorough knowledge of a particular destination, island or even resort then consider selling the real estate in that area,” he said. “Obviously there is a lot to learn but if you want to survive then get out there and get the knowledge.”

Report by Phil Davies