What future for the traditional high street travel outlets?

Historically the travel retailer existed because the travel principals, whether airline, tour operator or cruise company needed a point to and through which products could be seen and sold at high street level . The customer of course was less travel savvy a generation ago and there was a reliance to also receive destination information with the travel principal effectively covering the cost of both activities through commission structures.

The current climate sees a reduction in the use of full service airlines. Additionally the leisure product range is under some pressure with the customer base trying to reduce its travel budget. This and a visible migration of travel revenues to Internet based sites, thus bypassing the travel agent equates to tough times for many a high street retailer.

The retail community has already accommodated the general reduction in commissions made over the last 5 years as travel principals have sought to reduce point of sales costs. The corporate travel agents have moved towards a management fee based approach . What does the average high street retailer have to offer for which alternative charges (and a method of survival)can be levied on the customer?

The low cost airline model is arguably more resilient in the current climate. Loss of some traditional passenger volumes being replaced at least in part by alternative market segments 'downgrading' from traditional full service in order to contain travel costs. - Given most if not all revenue generation is direct to the carrier via the Internet , this resilience does little for the retail community.

In a territory which has advanced adoption of the web, inventory and product has been increasingly deliverable direct to the customer for several years. Many traditional travel principals have significantly less reliance upon the high street as a result.

Distribution through a third party with its associated loss of direct access to the customer has always sat rather awkwardly for the travel suppliers. It has been been the thorniest of issues for the low cost carrier. Recent legal action against websites accused of 'screen scraping' only highlights the wish of the no frills carriers to remain independent of third party involvement.

So will the low cost carriers embrace the retail community - well for the genuine locos I think the expression is ''hell will freeze over first!'' .However for the hybrid carriers - those parked between the genuine locos and full service, possibly! Thus throwing the retailer a little lifeline.

Is the high street retailer becoming a bit of a dinosaur ? Relegated to the scrap heap by the Internet with its unlimited wealth of travel information and direct access to air seats, tour products, rail seats and cruises. Well in the case of corporate travel, the retailer still has a value in the chain but for an increasing proportion including the leisure traveller, independence from the retailer is growing.

In the UK, Association of British Travel Agents now has 5500 retail members . A high of 7500+ less than 5 years ago indicates a rationalisation that is already underway


How long has this sector of the industry got ?? What can it provide to add value to the customer booking process and in doing so earn a revenue stream.



How will the retail industry look in 3 years ?

What do you think?