The future of high street travel agents in U.K. tourism

Travel Agents Analysis

The following pages will focus on providing an outlook on the situation of the U.K. tourism in general, and of travel agents in particular. The main aspects brought under discussion by this research paper regard the differences between traditional travel agents, on the one hand, and of e-tourism, on the other hand. Also, future trends in the field are presented, together with recommendations designed for improving travel agents' activity.

The introduction presents the importance of the problem and its implications. Also, the introduction provides a brief presentation of the research methodology used in this paper.

The following section focuses on establishing the hypotheses and the objectives of the research, as the starting point of any research. This is a very important section of the paper, as it provides theoretical background to the research in case. Also, this section is responsible for discussing the research options used for each objective.

Another section of extreme importance is the Results and Discussion one. This section presents the findings for every objective proposed by the research initially. This section somewhat denies the hypothesis that e-tourism will overcome traditional travel agents at some point.

The paper ends with the Conclusions and Recommendations section. This section reveals and supports the most important findings of the research papers. It also presents a series of recommendations that companies activating in the tourism sector could find useful.

Introduction

Literature Review

Method

Research Problem Definition

Research Scope

Establishing the Objectives and Hypotheses of the Research

Pre-estimating the Value of the Information Gathered from the Research

Selecting Information Sources

Selecting the Information Collection Method

Research Methods for Each Objective

Results and Discussion

U.K. Tourism General Situation

Identifying the differences between high street travel business and e-business

Advantages and Disadvantages of Both Types of Companies

Establishing the profitability of both types of companies

Determining the future of the two businesses

Determining the power of e-business

Conclusions and Recommendations

Reference List

Introduction

The following pages will focus on providing a research study regarding the current situation and the future of high street travel agents. In other words, the research question that the entire project revolves around is: what is the future, if any, of high street travel agents and will they survive?

This issues is a matter of extreme importance and it results could affect many parties involved in this matter. For example, it could be an important issue for the researcher. This is because this research project refers to a very present situation. In addition to this, such a research subject could be a great practice example because it incorporates several types of information collection. The project involves gathering and analyzing qualitative information, on the one hand, and quantitative information, on the other hand. Therefore, it is a very good way through which the researcher could see the differences between the two types of information, the relationship between them, and how these two types of information present complementary characteristics that are useful for attaining the project's objectives.

Also, the project deals with several methods of collecting the information. The research project in cause includes both primary sources and secondary sources. Regarding primary sources, the project involves the in-depth interview and the questionnaire sent by e-mail. The in-depth interview could be a great opportunity for the researcher to test its abilities and knowledge regarding psychology, sociology, and marketing. The researcher could gain experience this way.

Also, the researcher could see in the most practical way the differences between various investigation techniques, like the in-depth interview and the questionnaire sent by e-mail. The in-depth interview requires certain skills from the person conducting it. If the researcher does not have any experience in conducting such interviews, the first interviews with company representatives will not go in the direction required by this project. But after interviewing a few persons, the researcher will gain experience and the following interviews will go according to plan, given the fact that the minimum number of interviewed people should be 30 and the maximum should be 50. Therefore, if some of the interviews do not provide de expected outcomes, they could be eliminated from the analyses. The characteristics of the questionnaire will also be experienced in a practical manner. If the researcher does not have significant experience in elaborating such questionnaires, it is recommended to study some questionnaires that regard certain subjects that present similarities with the matter of this research project. Another important aspect of the research project is the fact that it also involves secondary investigation, allowing the researcher to explore this type of investigation.

The importance of this research project is also given by its subject, which regards a current situation. This situation affects several parties. It affects high street travel agents, online travel agents, and their customers.

The travel market is suffering serious modifications currently. High street travel agents lose more and more ground in favor of online travel agents. In 2001, over 35 million Europeans purchased travel products through online travel agents, especially for leisure purposes (Reitsma, 2002). The most popular products are airline tickets and hotel rooms, the same as previous periods. This online study presents information on travel market trends. These trends show that the number of travelers that prefer online booking to high street agents is increasing.

Another article that presents relevant information regarding the travel market situation and the importance of the subject is "What's the future for high street travel agents?." The article was published on TravelMole, the Online Community for the Travel and Tourism Industry in 2006.

World Travel News site also discusses the high street travel agents situation. The article "High Street Travel Agents Told Change Direction or Die Out" mentions that "up to 50% of independent holidaymakers, those who book hotels, flights and other arrangements separately, are snubbing high street travel agents and booking breaks on the Internet or via phone calls to tour operators." The article also mentions that the number of high street travel agents has fallen by 50% in the United Kingdom, although the travel market has significantly increased. This can only support the affirmation that high street travel agents will continue to lose ground in favor of online travel agents.

Travel market forecast do not show any improvements, as "a third of all travel agencies will close in the next 10 years unless agents embrace the Internet. Numbers could fall from just over 6,000 now to around 4,200 in a decade's time" (Technology Marketing Corporation, 2005).

A very consistent market research that could be used as a secondary source is Travel Agents and Overseas Tour Operators, conducted by MindBranch in 2007. The report contains information regarding: market sectors, market trends, market size, industry background, competitor analysis, SWOT analysis, buying behavior, current issues, the global market, forecasts, and company profiles. This report also mentions the great challenge that online travel agents are for high street travel agents.

This research project could be important for travelers also. The information provided by this research could help them decide about their travel options. The research could clarify a series of aspects regarding the activity of high street travel agents and online travel agents.

Literature Review

The following pages will focus on presenting an analysis of the situation regarding traditional travel agents on the one hand, and e-tourism, on the other hand. This information presented in this research paper was revealed by secondary sources mainly. Most of the sources consulted for this paper are consisted of articles from journals and newspapers in the field. Official reports provided by the U.K. government have also been consulted in order to provide a more complex outlook of the tourism situation in the U.K.

A series of websites that deal with tourism in the U.K. were studied in order to gather information regarding past situations in the field, current situations, recent developments, and future trend that are expected to characterize the evolution of tourism in general, and of travel agents in particular.

However there is a severe lack of data, information, and consistent studies in this field. This lack of information has been acknowledged by the government also. As a consequence, the U.K. government has established a research strategy that is required to be implemented in the future. The lack of such information on tourism significantly affects the situation of travel agents. Travel agencies' strategies should be based on thorough studies that would allow them to make the right decisions on a long-term basis.

Method

Research Problem Definition

The problem that makes the object of this research project regards the current situation of high street travel agents and their future in relation to e-business travel. It is recommended to establish all the advantages and disadvantages of the traditional travel business and of the e-business. These advantages and disadvantages must be studied in terms of companies and clients also. It is also recommended to establish the performance of each type of travel business, in terms of financial results and number of clients. Customer satisfaction is another factor that must be taken into consideration, given its importance to the matter. A company's success or survival, no matter the field it operates in, relies on the satisfaction that the company is able to provide for its clients.

Research Scope

The scope of the research regards the synthetic definition of the information that must be obtained through this research. The scope of this research project is determining and evaluating the current situation and estimating the future situation of high street travel agents compared to the e-business travel that gains more and more field.

Establishing the Objectives and Hypotheses of the Research

The objectives reside from the scope of the research, presenting on operational level the information that must be obtained from this research. In this case, in the study referring to the situation of high street travel agents, the following objectives of the research must be taken into consideration:

Identifying the differences between high street travel business and e-business

Finding advantages and disadvantages of both types of companies

Establishing which type of business is more profitable and the reasons for which this situation occurs

Determining what will be the future of these two types of business, the future relationship between them, and if one will overcome the other

Determining the power of e-business

The hypotheses of the research represent anticipated answers or assumptions regarding the objectives followed by the research, starting from information obtained from previous research projects, from existing theory, from accumulated experience, or from exploratory research conducted in this matter. In relation with the research objectives presented above, the hypotheses of this research are the following:

high street travel agents lose more and more ground in favor of e-business travel the future of the industry relies almost completely on e-tourism

Pre-estimating the Value of the Information Gathered from the Research

This step of the research follows the a priori evaluation of the research's efficiency, reporting the estimated research from using the information gathered from the research to its costs. The criteria that form the basis of information value quantification are the following:

Accuracy

Up-to-dateless

Relevance

Sufficiency

Availability

Results and Discussion

The findings discovered by the current research paper are based on secondary sources mainly, and address the situation of the U.K. tourism and the situation of high street travel agents, online travel agencies, interdependencies between them, and their future evolution. However, in order to provide an accurate and thorough analysis of the high street travel agents, one must first analyze the general situation of the U.K. tourism.

U.K. Tourism General Situation

This section provides information on U.K. general situation regarding tourism. This section is very important, given the fact that it provides information regarding the general framework in which high street travel agents and online travel agencies activate. Their activity's success is very much depending on the market situation, on the opportunities provided by the market, on the threats that both high street travel agents and online travel agencies must counteract, and on the future trends expected to influence tourism in the U.K. On long-term, on the one hand, and on short-term, on the other hand.

Tourism is one of the most important sectors of the U.K. industry and it requires special attention. Actually, tourism is the fifth largest industry in the U.K., and its importance is given by tourism's contribution to wealth creation and to the gross domestic products (U.K. Government, 2008). Tourism is a profitable activity for all the parties involved: for the government that benefits from tremendous contributions due to tourism, the agents and agencies involved in tourism that benefit from tourism's continuous development and expansion, and the workforce engaged in tourism activities.

U.K.'s tourism sector reaches a size of

75.9 billion and it currently employs approximately 2.1 million people, which accounts for 7% of employed personnel in the country. Tourism's long-term growth potential and the opportunities for development and expansion create a favorable environment for travel agents, whether they are high street travel agents or more modern online agencies. As a matter of fact, the U.K. tourism sector comprises a total of approximately 127,000 businesses. Of this total, 98% are small firms with less than 50 employees. This fact proves that tourism is a more profitable activity for smaller firms rather than large corporation. The more flexible the company's structure is, the easier the company is able to develop its activity.

However, there are certain issues that must be addressed by the government by strategies and policies, so that these issues do not become threatening to the tourism sector in general and to the activity of travel agents in particular. Strategies and policies in the field address the following issues:

Economic importance - given the fact that the tourism sector accounts for 4.5% of the national GDP and the fact that it presents great long-term growth potential, the government must be very supportive with travel agents, since the tourism sector depends mostly on them Fragmentation of the sector - the tourism sector is characterized by great diversity, which means that there is a severe lack of strategic thinking. The lack of such long-term sustained strategies for travel agents will have severe repercussions in the future. These repercussions will be quite difficult to counteract, which could lead to a possible crisis in the future.

My opinion is that travel agents think strategically only for short-term, as They are more focused on immediate profit

Data - the lack of fully comprehensive market information prevents both the government and travel agents to take consistent actions regarding their activity, or to build long-term strategies

Marketing - marketing campaigns conducted by travel agencies are not consistent enough and are not based on significant information, given the lack of data discussed above Regeneration - it plays a very important role in the future of tourism in general, and of travel agents in particular

Societal - travel agencies should get more involved in the life of the communities they activate in, which could represent the basis for long-term sustained success

Infrastructure - the U.K. infrastructure is over used and it requires continuous attention regarding its development and expansion

Variable demand - the tourism sector is characterized by ever-changing demand trends, which make it difficult for travel agents to set long-term strategies and to follow them Recovery - since 2001 there has been an acute need for government involvement in the recovery of the tourism industry

As mentioned above, there is a severe lack of data regarding tourism which significantly affects the activity of tourism agents in the U.K. The government admits that a consistent research strategy in the field is more than required.

Identifying the differences between high street travel business and e-business

The differences between the two types of business derive from their advantages and disadvantages. Traditional travel agents rely more on traditional management and marketing techniques. They require great investments regarding technical resources, financial resources, and human resources. These significant investments are reflected in the companies' prices. E-tourism however, requires less financial investment that allows the company to focus on other aspects of the business, like customer attraction, customer satisfaction, long-term strategy.

Advantages and Disadvantages of Both Types of Companies

The advantages of e-tourism are:

E-tourism is a modern way of doing business - it incorporates fast communication, global accessibility, minimal costs for emerging businesses (the Scottish Parliament, 2002).

It provides cost effective communications

It makes purchasing easier for customers, and it also provides impetus for the improvement of customer service

New opportunities can emerge from collaboration with previous competitors

Online businesses are currently characterized by a significant general growth trend

Future prospects show that approximately 33% of the travel buying population will purchase a great part of their travel products online

It reduces cost through increased efficiency in internal operations and purchasing processes

It encourages increased cooperation between traditional competitors

The disadvantages of e-tourism include:

Some customers are reluctant to releasing private information on the Internet

Many customers prefer conducting transactions in a face-to-face environment

The existing travel agent business is superceded, which leads to job losses

Developing inequality and social exclusion for customers and business that cannot access the required technology

The advantages of high street travel agents are:

It does not require special technology for customers to access

It offers personalized services that are able to address each individual

Customers are less reluctant to providing information

Many customers prefer to conduct transactions in a face-to-face environment

The disadvantages of high street travel agents are:

Sustaining such a business can become quite expensive

Reduced efficiency

Increased costs

As one may observe, both high street travel agents and e-business have their advantages and their disadvantages. None of the two types of business seems to be complete. They are complementary to one another.

E-tourism provides a series of advantages like easy access, reduced costs, modern environment. It is quite easy for an e-tourism agency to enter the market, given the reduced required investments. Instead, the financial resources that are saved this way, can be used in other areas, like expanding the company, or investing in long-term strategies and customer satisfaction. Also, this law level of initial investments allows e-tourism agencies to enter the market with very low prices for their products. However, these advantages are somewhat counteracted by the disadvantages presented by this type of business in the tourism sector. Therefore, certain customers distrust this type of business. Also, not all the customers have access to the necessary technology required by e-tourism agencies.

The same situation goes for high street travel agents. Their main disadvantage is the implied relatively high costs. These high costs reflect in the prices of the high street agents' products. However, the degree of confidence from their customers is higher. In this situation, customers also benefit from personalized products, which leads to an increased degree of loyalty amongst the agents' customers.

As mentioned above, none of the two business types is perfect for the tourism industry. Given the fact that the two business types somewhat complete each other, it is recommended for tourism agents to incorporate the positive traits of both types. Incorporating the advantages of both company types into a single one could counteract the disadvantages of either one of the two types of business, leading to a new, competitive, and complete model of business with long-term success in the tourism sector.

Establishing the profitability of both types of companies

The profitability level for each of the two types of business derives from the advantages and disadvantages mentioned above.

Recent surveys in the field have discovered that "traditional high street travel agents are still an important part of the travel experience for many travelers" (Eye for Travel, 2008). Approximately 44% of people surveyed used a travel agent to book part or all holiday last year, and almost 29% more phoned or visited an agent in order to gather more information regarding the travel package.

Even more, customers' opinion on high street travel agents was extremely positive in most cases. 81% of the surveyed people considered to have been offered honest, trustworthy advice from their travel agents. 90% of them were willing to recommend their travel agents to other people.

However, certain polls regarding the prices of travel agents revealed negative attitudes from the respondents. Such an online poll is presented below:

Question: Is haggling with travel agents immoral?

No. We've spent years being taken for a ride by them, why shouldn't we try to get the best price? 611 voters - 88.55%

Yes. These people work hard to give advice, they should be rewarded. 18 voters - 2.61%

No. Providing its only with direct sellers and you haven't been given their advice first. 61 voters - 8.84%

On the other hand, e-tourism business is also quite profitable. The main reason for e-tourism agencies' profitability is the low level of investment required by such an e-business. Where e-tourism agencies are concerned, there is no need for sustained technical resources, human resources, or large financial investment. Money saved from not investing in these areas can be further used for entering the market with lower prices for the company's products. This will attract more customers and it might increase their degree of loyalty. This will lead to increased profitability on a long period of time.

Determining the future of the two businesses

The future of high street travel agents looks quite bright, despite past negative assumptions made by certain experts in the field. A few years ago, when e-tourism was practically flourishing, many experts in the field were quite certain to state that e-tourism will soon overtake traditional travel agents. Indeed, e-tourism has significantly expanded over the past few years, but not enough to seriously threaten the future of traditional travel agents.

As several surveys and polls have revealed, a great part of travelers prefer traditional travel agents to e-businesses. Their preference is due to the advantages of traditional businesses, while the disadvantages of e-business pull them away from e-tourism. The trust provided by traditional travel agents will probably never be surpassed by e-tourism. Also, lack of access to the required technology by e-tourism grants a small advantage for traditional travel agents.

However, e-tourism is expected to continuously develop also. This kind of business is preferred by young travelers or by business travelers that do not have enough time to spare for talking face-to-face with a traditional travel agent. Also, this is a cheaper and faster method for buying travel related products. Therefore, the advantages provided by using e-tourism account for a bright future for e-tourism agents.

Determining the power of e-business

Given the global economy that characterizes today's world, e-business will become more and more profitable in any domain. E-business are also benefiting from continuous development and expansion. The same situation does not apply for traditional business. Traditional businesses have somewhat reached their peak. There is little chance for them to develop.

Therefore, it is expected that at some point in the future, he largest part of worldwide business will be electronically conducted. This will affect all sectors, including tourism. However, this does not mean that traditional businesses will disappear. But they will surely account for a smaller percentage of the total of businesses. The advantages provided by e-commerce will significantly affect all parties involved: the companies, which will benefit from reduced costs and increased profitability, customers, which will also benefit from these reduced cots that will probably reflect in reduced prices, and the government, which will benefit from increased contributions due to the expansion of e-commerce.

Conclusions and Recommendations

The previous pages have focused on providing a general image of the tourism activity in the U.K. In general, and an analysis of travel agents in particular. The information presented in the paper is mainly based on secondary sources, as these were more relevant to the study. However, as mentioned above, there is a severe lack of data regarding the U.K. tourism. His lack of information is also acknowledged by the government that has established a thorough research strategy in the field.

The most important aspect addressed by the paper is consisted in the differences between traditional travel agents and e-tourism agencies. None of the two types of business represents a complete business model that can be successfully followed on a long-term basis. Both types of businesses have their disadvantages, which makes it quite difficult for any of them to overtake the other.

On the one hand, traditional travel agents' advantages allow them to be preferred by a large percentage of the travelers. Traditional travel agents provide more trust for their customers. Also, for some customers it is better to talk face-to-face with their travel agent for gathering information. Most of the customers declare themselves satisfied with a traditional travel agent.

On the other hand, the advantages of e-tourism agencies are quite significant. These companies are able to save time and money for their customers. Many travelers consider this type of travel agent to be more comfortable than the previous one.

My opinion is that the choice between the two types of business does not regard their advantages and disadvantages, but it mostly regards the type of customer. As a consequence, traditional travel agents are preferred by older customers, family-oriented, and tradition-oriented. E-tourism agencies are preferred by younger travelers that desire a more modern environment that can save them time and money, and by business travelers that do not have enough time to discuss aspects regarding their traveling with a traditional travel agent.

Therefore, it is recommended that travel agencies incorporate both types of business. This way, they will benefit from advantages from both types of business, while successfully counteracting the disadvantages. Also, incorporating both types of business into one will allow tourism companies to address all types of customers mentioned above.

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