Thomas Cook backs shops – but more will shut

Saturday, 04 May, 2006 0

Thomas Cook has pledged its commitment to high street stores, but admitted that more will have to shut as holidaymakers increasingly book online.

According to new research from the company, 92% of all high street holiday shoppers have recently booked in a store and 70% of high street shoppers prefer to book in an agency.

However, statistics show that only six per cent of visitors to agencies are actual bookers, with most people picking up brochures to take home and read at their leisure.

An increasing number of people are booking online and, according to Hitwise, four of the top six travel agent websites now belong to the four vertically-integrated companies.

Surprisingly, many internet bookers do so well in advance of their holiday, rather than at the last minute. Some 15% of package holiday buyers on the internet bought six to nine months in advance of travelling and another 15% booked three months ahead of the trip.

Speaking at the launch of ‘Changing Channels’, Thomas Cook’s new report into holiday shopping habits, UK chief executive Manny Fontenla-Novoa said: “We have got 574 shops and over the next three years that will drop to around 500. But it is absolutely a key part of our strategy and I believe people will continue to want that face-to-face contact in shops.

“Stores are adapting well and now offer a better service than they have ever done before.

“If you look at internet sales, then it’s the big companies that are doing well. Expedia may still be the most visited site, but its share is dropping and it has got problems. It sells lots of flights but you can’t make money on that. They’re trying to sell beach holidays but they haven’t got the stock that we’ve got.”

Fontenla-Novoa praised the work of Travel Counsellors, which employes agents that visit people in their homes and work places, but ruled out a similar move by Thomas Cook.

“It would be very difficult for a company of our size to control,” he said. “You need someone who can really oversee it and keep a handle on everything as (Travel Counsellors’ founder) David Speakman has done.”

Fontenla-Novoa said sales via its television travel channel had peaked and admitted that if he had his time again, he wouldn’t have launched it.

“It takes around 90,000 bookings, so it is useful, but you have to look at the cost of sale,” he said.

“It used to be 17-18% of sales, which is too high, and we’ve now got that down to 14-15%.

“The big problem is that you have to spend a lot of money on television programmes to make them interesting and you can never afford to do that when you are selling holidays where margins are tight.

“If I hadn’t already got into it, I wouldn’t be doing it now.”

Report by Jeremy Skidmore (www.jeremyskidmore.com)