TUI shop closures mark turning point for UK travel agents
45% of global tourists will buy more products online
According to travel industry experts, today’s news that TUI is closing 166 travel agencies in UK and Ireland, is not surprising after the European travel giant already declared initiatives to digitize operations in its half year results earlier this year.
With 45% of global tourists opting to buy more products online in a post-pandemic world, it is likely that more UK travel agents will evaluate their brick and mortar strategies and make this move to trim costs at a time when demand has not yet returned.
Agencies and operators with a more asset-light business model are still at a clear advantage to withstand the uncertainty that continues to surround travel recovery because they do not have high fixed costs such as rent, bills and other utilities to pay for. TUI’s decision to unload is a sign that it is looking to move in this direction.
Furthermore, last year, the consumers that would most typically book at an in-store travel agency were aged 65 and over (20%). As these fall into the ‘vulnerable’ category for COVID-19, they are likely to be nervous about travelling while the virus is still at large. In fact, 43%* of this age group say they are planning to reduce international travel in the short-term.
In light of the colossal slump in demand brought on by COVID-19, this is rather a big issue for operators with a high reliance on in-store revenue and may further delay many operators’ recovery. It would be wise for these operators to re-focus on developing their online platforms to better cater to a wider range of tourists amid sweeping changes in consumer preferences.