The pandemic was a once-in-a-lifetime shock for travel – so three-and-a-half years after the world was plunged into lockdown, is travel ready to move on – and up? James Chapple runs the rule over six months of TTG Travel Agent Tracker data to find out.
How it ended was always going to matter, but not half as much as when; believe it or not, it’s been three-and-a-half years since most of the world was plunged into lockdown following the onset of the Covid-19 pandemic.
Almost overnight, any thought of travel – certainly leisure travel – was reduced to little more than our daily state-sanctioned walks, flicking through guide books, surfing Google Maps or just gazing longingly out of the window (if you were lucky enough to have one with a reasonable vista!).
That was, of course, unless you actually worked in travel – especially as a travel agent. Reversing a two-year order book almost overnight simply wasn’t possible, placing unprecedented stress on the legendarily resilient travel trade.
Yes, we got people away in July 2020 and the following summer, but these glimmers of hope were false dawns. It wasn’t really until the latter stages of 2021 leisure travel resumed in any meaningful volume – and then there was Omicron.
Last summer was blighted by staff shortages and operational disruption at most UK airports; Manchester’s boss walked, while Heathrow enforced a 100,000-a-day passenger cap. The situation peaked in June 2022 when more than two-thirds of respondents to TTG’s Travel Agent Tracker ranked air travel delays and disruption as being among the biggest issues facing their businesses.
The issue lingered among the top three issues faced by agents for five consecutive months – May (54%), June (67%), July (51%), August (41%) and September (30%) – second only to getting hold of suppliers, who were understandably facing their own staffing challenges.
But whisper it, things don’t half feel, well, sort of "normal", don’t they? Yes, Russia’s invasion of Ukraine has destabilised economics on a global scale, contributing to the cost of living crisis here in the UK and Ireland, and forcing the closure of some 20% of European airspace. But these are the kinds of challenges travel has always taken in its stride.
In fact, after a strong start to 2023, when asked whether the post-Covid bounce was over, two-thirds of the 132 respondents to TTG’s latest Travel Agent Tracker survey – covering the three months to 30 June (Q2) – said yes, it was.
"Our footfall overall is a lot lower than normal and our clients are wanting more bang for their buck – they’re extremely price-conscious," said one high street agent. "We are selling roughly the same amount as last year, so we’re still doing well overall, but it certainly seems less busy and demand is much lower."
So has travel – and agents – been able to finally start drawing a line under the pandemic? Let’s consider this travel’s mid-year report…
Straight off the bat, one of the biggest challenges for all travel businesses during the pandemic – big or small – was simply staying afloat, prompting many to take advantage of government support or turning to commercial loans. When asked if they were still servicing Covid debts, three in 10 respondents (31%) said they were.
Recruitment continues to prove a challenge, with several agencies in recent months – such as Oasis Travel and Travel Experience – revealing to TTG how they have had to look outside or beyond travel to rebuild their teams. With that said, only a third of respondents (33%) said they were casting the net wider. "Trying to get experienced staff is the main problem," said one agent. "Travel isn't the best paid job, so people are leaving for more money."
Pricing, though, clearly remains agents' biggest headache, with agents reporting prices going up across the board. At the same time, agents tell TTG consumers' expectations of what they'll get for their pricier holidays are out-of-step with reality. In addition, more and more consumers are shopping round, running comparisons and coming to agents asking them to match – or even undercut – direct pricing, especially with those from vertically integrated suppliers.
"Clients expect prices to be a little above pre-pandemic prices, in line with general inflation, when in fact they are much higher," said one respondent. "They have unrealistic budgets and are also reluctant to compromise their requests."
Others said they were having to manage clients' expectations with regards to what they will get for their budgets. "They are shocked by the price increases year-on-year," said one agent. Another said: "It's not that the money isn't there, you just can't get what people want for the money. We're having to think laterally and come up with something different."
A third added: "Tour operators are increasing their prices – we are occasionally having to eat into our commission to match prices," while a fourth said: "Price matching the big operators is a huge problem."
Unsurprisingly, this has affected how agents are discounting, although it appears that while a greater proportion of Tracker respondents discounted in Q2, the extend to which they discounted decreased compared with Q1.
During Q1, 20% of Tracker respondents said they discounted by between 6% and 10% on average, and 3% by 10% or more on average. In Q2, the proportion of agents discounting by between 6% and 10% fell from 20% to 16%, while the proportion discounting by 10% or more increased from 3% to 4%. This means there were 3% fewer agents discounting at the higher end of the scale going into Q3.
However, during Q2, only 10% of agents said they didn't discount at all, compared with 25% in Q1. This suggests that while higher-value discounting has gone down, discounting as a whole has increased.
Recent spending reports from the likes of Barclays and Nationwide have for several months tracked a slow but steady increase in spending with agents on travel at the expense of other areas of discretionary spend, and this is reflected in half a year of TTG Travel Agent Tracker data.
The number of agents telling TTG their average price per head was up to £1,000 fell from 16% in Q1 to 14% in Q2, meaning fewer agents were selling in that lower price bracket – hinting at an increase in spend. Meanwhile, 10% of Q1 respondents said their clients spent less during Q1 2023 than in Q1 2022; this fell to 8% in Q2 2023 compared with Q2 2022, again, suggesting an increase in spending during Q2.
Another issue raised by Q2 respondents was schedule changes; one said their biggest challenge was the amount of time dealing with changes. "Often, these are late notice so you have to drop anything else and deal with them." Another added: "Airline schedule changes is a big one [issue] and very time-consuming."
A third said: "Customers want to change their bookings two to four times, on average, after confirming a booking. This can include adding nights, removing nights, changing arrival or departure dates, room types, adding people or removing people, etc. Then they want us to do all this extra work for no extra money or next to no extra fees. Even if we hire someone just to do this, the cost hardly justifies the upside."
Elsewhere, the market remained late during Q2 – and was showing the signs of getting even later. Nearly half of all Q1 respondents (48%) said between zero and 25% of their bookings were for departures within the next 12 weeks; this fell to 41% in Q2, with that 7% being dispersed among the other options (26-50% – 42%, up from 39% in Q1; 51-75% – 16%, up from 11% in Q1; and 76-100% – 1%, down from 2% in Q1).
Summer 2023 was among eight in 10 respondents' top three most commonly booked seasons, down from 88% in Q1, followed by summer 2024 (63%) and winter 2023/24 (56%). Some 45% of respondents said they saw an uptick in all-inclusive enquiries during Q1.
The Med remained agents' most commonly enquired after and booked destination in Q2, followed by by Europe (non-Med), although the US and Canada moved into third, edging ahead of the Caribbean and Indian Ocean, while beach holidays, cruise and all-inclusives led the way with regards to sector-specific bookings.
Amid all the upheaval, though, there has remained one constant; agents' confidence for the future after their value was recognised anew during the pandemic. Seven in 10 respondents (71%) said they felt either very (30%) or quite (41%) optimistic about the next quarter, compared with 69% (split very – 33% and quite – 36%) in Q1, while 23% said they felt about 50:50 about the next quarter, up from 21% in Q1.
"I’m a travel agent – I’m always optimistic!" said one respondent. Another said: "People are still desperate to get away even on low budgets," while a third added: "I’m getting many requests for quotes, although it takes some customers time before they confirm a booking – I feel optimistic that I present more value."
TTG's next Travel Agent Tracker survey email invite will go out towards the end of September, covering trading in the three months to 30 September. You can catch up with the Q1 report and Q2 report now, in full.
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