ABTA: Thomas Cook Cutbacks Not Reflective of Industry Health

Thomas Cook Group’s plans for significant store closings and employee layoffs do not reflect the state of the U.K. travel industry overall, according to ABTA, the largest organization of British travel agents.

Thomas Cook Group said it would cut its British and Irish workforce by 2,500 people, as it struggles to adapt to competition from online travel sites. The 171-year-old company announced plans to cut its payroll by 16 % in the U.K. and Ireland and close 195 of its 1,069 offices in those countries – where it employs 15,500 people. About 900 of the positions being eliminated are administrative or managerial.

Avoid drawing conclusions
In response, ABTA, formerly known as the Association of British Travel Agents, issued a statement: “We must avoid drawing more general conclusions about booking trends among high street (the U.K. equivalent of brick and mortar) agents from the news.”

While ABTA estimates that between Dec. 2010 and Dec. 2012 the number of ABTA member offices slipped from 5,215 to 4,991, it said the current numbers show “there are still a very large number of travel businesses operating successfully on the high street.”

ABTA also emphasized that, according to its 2012 Consumer Travel Trends Survey, “in the last three years there has been a 10% increase in people booking an overseas holiday through their high street travel agents, with 27% of people having used this method to book an overseas holiday.”

The organization also noted that its research shows that many consumers value the personal support that agencies provide. “The key for travel businesses is to make sure that they have options and expertise available to support customers however they like to book – whether that’s online, on the phone or in person.”

Agency closures slowing
ABTA has also taken issue with a recent study by PwC and the Local Data Company which found shop closures of all kinds averaged 20 a day in the U.K.’s top 500 towns. While it listed travel agencies among the most affected, the study did not release agency closure figures. It also did not list agents among its “top failers” by business type.

ABTA responded with figures showing its member offices fell 4% between 2010 and 2012, a lower rate than in previous years. The number of ABTA member outlets even rose last year –by 18. ABTA, whose members comprise about 80% of the travel agency sector, said its figures show the rate of agency closures is slowing.

According to ABTA, member agencies closed at more than double the current rate in 2007 (9%). They closed at the rate of 7% in 2009, the worst year of the recession, and at 6% in 2010 when Thomas Cook retail, The Co-operative Travel and Midlands Co-operative merged.
 
According to ABTA, its 1,200 members currently provide 90% of overseas package holidays and nearly all of the main tour operators in the U.K. are ABTA members.

Another positive side is that other travel agency groups may move in on Thomas Cook locations. According to a report in a U.K.-based travel trade publication, Hays Travel is considering opening branches at former Thomas Cook stores and may also recruit staff for its home agent division.