Travel agency insolvencies have fallen 30% in five years.
The number of travel agency and tour operators going insolvent has fallen from 47 to 33 per annum as the impact of the internet slows, according to accountancy firm Moore Stephens.
Travel agencies are benefiting from British people taking more holidays than at any time since 2011, as the economy emerged from the financial crisis.
Moore Stephens says that the internet revolution of the last two decades has thinned out the less financially stable businesses, leaving those whose business models are better insulated against the threat of consumers buying DIY holidays.
The research found there are a number of agencies successfully operating in niche interest holidays and specialised trips where the knowledge and levels of services offered is highly valued by the customer.
• Bespoke luxury tours that involve a high level of local concierge service
• Activity or extreme holidays such as, cycle tours across the US and guided treks through the Himalayan mountains.
Despite the fall in annual insolvencies, Moore Stephens says that the market for travel agencies is still challenging and “inherently uncertain”.
Increased competition and new technology platforms, from Skyscanner and Airbnb, continue to make it easier for regular holidaymakers to ‘self-organise’ their travel without the need for an agent.
Moore Stephens said corporate customers are still a key market for travel agencies as they are more likely to outsource their business travel arrangements.
Chris Marsden, restructuring and insolvency partner at Moore Stephens, said: “Travel agencies are performing better than they have been in recent years.
“More travellers, especially from the younger generation, increasingly want an ‘experience’ rather than just a holiday – that gives travel agents and tour operators a real opportunity.
“It is harder to piece together those more complex, once-in-a-lifetime holidays from the internet, and that is where travel agents can still compete really well. The successful travel operators are those that have moved away from standard package holidays to more boutique and bespoke products.
“Travel agencies are also often able to offer better rates and upgrades than those that can be found online, as they are likely to have a relationship with their suppliers which allows them to negotiate prices.
“The market is both challenging and continually evolving, and agencies must fight to stay relevant against online-only competitors.”
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