The Future of Contemporary Travel Agencies

Table of contents

This research considers the development of the online platform in the travel business, considering its impact on the traditional, bricks-and-mortar agent. Through the development of a case-study and UK-based interview, the research finds that while the growing online presence continues to take market-share from the traditional agent, there is the ability for both to coincide and complement each other.


As consumers become more receptive and confident with the use of technology, more may be willing to finalise their plans and purchase their holidays online. The introduction of more secure bank payment methods and the development of platforms such as PayPal should facilitate this change. Due to this, travel agents will come under increasing pressure to compete, with the main platform being the competiveness in price. The development of price comparison sites such as Skyscanner (flights) and Trivago (hotels) have allowed tourists to now easily conduct searches for desired locations. Barnett (2001), highlighted that pressure had begun on traditional travel agents to develop their business models/ marketing as-well as increase competition on price; due to the current development of the online offering since 2001, such as the sites mentioned above, this competition is only expected to have intensified. The study mentioned that in a bid to compete, many traditional agents should consider a movement into online space, either through direct company involvement or through alliances, affiliates.

This project will look into the development of the online travel marketplace; documenting the rise of the ‘online’ travel agent; led by Expedia and more recently the surge in comparison websites such as Skyscanner and Trivago. These developments have pushed more demand onto supplier’s themselves. With airlines and hotels now having their own websites, customers can book direct, rather than going through an agent, seen as a middleman who would charge a commission.

The project will use previous studies to develop an understanding of the changing strategy of the ‘traditional’ high-street travel agent, delving into how these companies are changing their strategy and product offering to remain competitive in the face of higher online competition. So, the project will be focusing on the changing face of the ‘traditional’ bricks-and-mortar business in times of higher competition from the clicks-and-mortar business model.

The literature review will provide a general look into previous studies, which have focused on the development of the online travel marketplace, while also considering the development of marketing by the bricks-and-mortar agent to compete. The study will also introduce a focused case study to add depth in answering the research questions. The case study will provide a detailed look into one traditional travel agent; this study has chosen Thomas Cook (reasoning detailed below), taking into account the company’s current product offering and service level. The study will focus on Thomas Cook’s development over the years to increase competition with the new array of online competitors.

To back up findings identified in the literature review and case study, this project will also conduct an in-depth, semi-structured interview with Thomas Cook store management to develop a greater understanding in the current development of marketing.

It is hoped that the information collected will all three sources mentioned above will allow for a relevant and supported conclusion to be developed, where findings will be presented and recommendations given for how travel agents, both UK-wide and small-scale can increase marketing to retain market share and compete with the growing online offering.


The motivation behind this study has come from employment in the travel sector, creating an interest in the travel industry, most notably in travel marketing. The issue for many traditional travel agents is the increase in online competition; adding comparison sites and supplier direct sales, which is putting extreme pressure on travel agents.

The study will use the information collected in the case study/ interview and from the prior literature review to present a discussion on the development of marketing in the travel sector to aide in improving the traditional travel agent. It is hoped that a number of these findings can be applied to smaller travel agents to ensure future business and profitability.

Before deciding upon the direction on this study, a review into previous studies was conducted to see the methods used and findings achieved. The majority of previous studies focused on consumer preference from the USA. Smaller studies were found from the UK/ Asia however these were either small-scale or dated studies, providing little knowledge to the overall body of research. Given this, the aim of the study was to focus on responses from the supply-side, namely the travel agents. It is believed that this addition to the pool of research would add a greater understanding of the actual effect on the supply side, rather than forecasts based on responses from the demand side (customers). Furthermore, responses from travel agents themselves will be of greater use for a focus on marketing, especially when the project will consider ways in which travel agents can improve their offering to compete effectively with the Internet.


The research questions provide a clear direction for the study, identifying its focus on the current business environment and future marketing strategies to ensure the traditional travel agent remains competitive with the growing online competition. The study will look to answer the following research questions:

How can traditional travel agents develop an Internet platform successfully
How can the traditional travel agent improve marketing/ customer offering to remain competitive versus the Internet in the coming years
What methods can the traditional travel agents use to improve their offering and customer services
Apart from the Internet, what are the main challenges faced by the traditional travel agent and how will they impact on marketing

To ensure these questions are answered the researcher will ensure that the planned case-study touch upon these subjects,


Thomas Cook has been chosen as the focus company for the case study. This choice was influenced by the availability of information from Thomas Cook. The company provides development plans in its Annual reports, while further information is also available on the company’s website, Thomas Cook (2014) [Online].

To add, Thomas Cook was also chosen due to early-development into an online platform; the company currently has an online presence, which it teams with its high-street stores in a bid to provide the greatest offering, while still retaining the face-to-face, personal service that a traditional store brings.


The literature review will focus on the Unique Selling Point of the bricks-and-mortar agent, mentioning its customer draw as online competition has grew. The review will also pay close attention to the growing movement of a multi-channel travel agent, with both a traditional store offering and online platform, before mentioning how the movement online will differ for agents based on size, scope and marketing.

From completing the literature review, it was evident that the subject had received a wide-range of study over the years, however due to the ever-changing online landscape placing further pressure on travel agents; more recent study is needed to complement older projects and provide extra knowledge and opinion to the field. Throughout the research, the main topic that came evident was the increasing role that the Internet was playing for the consumer and the increasing competition this was adding to the overall market; however, there was support for the bricks-and-mortar agent based on the higher level of service provided versus online competitors such as Expedia.

Lang (2000) completed a look into this area, conducting research in the USA with the initial view that there would be no need for travel agents in the future, as consumers turn to the Internet. While the study did find that more consumers were using the Internet to collect information on holidays and destinations, the majority was still hesitant to book online. Factors included the perceived lack of a secure payment method, lack of confidence in technology and the need for human interaction and a personal service in the process of booking a holiday. Taking the points above, this study concluded that there was actually the chance for both the Internet and ‘traditional’ travel agents to co-exist and benefit each other. The Internet had the potential to become a domain for greater information and public opinion, allowing consumers to collect the information they need and narrow down their choice. The travel agent would act as a re-assurance and help consumers piece their holiday together and finally book. This conclusion fitted in well with the traditional travel agent, both in the US and UK, do to travel agents in the UK, such as Thomas Cook and Thomson, being well-known for package, and all-inclusive holidays.

Further studies continued to support this conclusion; Law et al (2004) studied tourist perceptions of the Internet in the UK, looking into the potential to eliminate high-street travel agencies. The study collected opinions from 413 tourists based in the UK. The main conclusion from the study was that while the tourists polled found the Internet more useful due to the increasing amount of information and reviews, in the end they were still reluctant to book their getaway online. The tourists still preferred to use travel agents for the professional service and personal advice for their bookings; again the project concluded that the Internet and traditional travel agent could co-exist. Frais et al (2008) added to the subject and concluded that while the use of the Internet had grown rapidly for travel; its use had worsened the image of the destination due to the vast amount of traveler information and opinions around. The study, citing the use of website TripAdvisor, mentioned that the site had added to the available information whilst making it harder for consumers to choose. Given this, consumers still used the traditional travel agent for direction and re-assurance.


The main selling point from travel agents has always been their customer service and face-to-face interaction. Walle (1996) argued that the key strength to the traditional travel agency is their ability to provide personalised advice and information to travelers when needed. The role of the traditional travel agent would thus be secured as long as customers continued to view them as a source of reliable information, rather than just a ‘booking agency’. Customers have continued to visit travel agents to receive expert advice, see new destinations on offer and get peace of mind that the holiday they want has been booked. According to Litvin et al (2007), in the past, neighborhood travel agents, selling third party products, served as a trusted opinion to their clients, with the relationships they built up serving as their selling point. This, in turn, allowed for travel agents to build up relationships with travel industry suppliers, allowing for traditional agents to get access to resorts and prices that continued to attract customers. However, the study comments that the new breed of online offering do not provide face-to-face and so, focus mainly on price and destination offering. To add, to compensate for the lack of face-to-face interaction, virtually all electronic travel agencies now offer web pages that feature customer reviews of the products they distribute, however the usefulness of these reviews is debatable, Litvin et al (2007). Finally, the study mentions that while the online offering currently has no marketing strategy to satisfy the traveler’s need for reassurance and guidance as traditional agents do; the situation is improving. To travelers, while the odd review has little value, collectively, these reviews can provide a strong sense of product and contribute to the customer decision-making process. This is one reason why TripAdvisor has performed so well in its online offering, however the above also highlights why traditional travel agents remain competitive.

Law et al (2004: 100) also mentioned that the success of the Internet offering will depend on its ability to “enable e-travelers to easily arrange and purchase their own services/ products”, with the role of the traditional travel agent falling as the Internet is more able to reduce perceived risk and provide guidance and reassurance to potential customers.

A study from Forbes (2008): highlighted the issue faced by the Internet perfectly in the title – “When something goes wrong and no-one is around”, referring to the fact that while the Internet has the benefit of being a 24 hour service, customers would fell reluctant to book as there is no-one to help when a problem occurs, whereas a traditional travel agent provides face-to-face service.


This section will consider the development of the online marketing strategy, providing previous conclusion to help answer research questions one and two. Understanding how online travel marketing has developed will allow for suggestions on how the bricks-and-mortar agents can compete.

As the Internet has developed, more and more companies have turned to a multi-channel business, compromising both traditional stores with an online presence. Bernstein et al (2006) conducted a study, focusing on the US market and found that retailers are increasingly becoming ‘Clicks-an-Mortar’ offerings by incorporating Internet sales into their business. The study mentioned that the rapid development of technology had provided new means for retailers to reach potential customers. Zerega (1999), mentioned that many traditional retailers now view the Internet as an expansion/ complement to existing business, while Scott Silverman, Internet Retailing Director at the National Retail Federation said:

“Branding is a tremendous advantage and cross-promoting it over the Internet and in physical stores will open up new selling opportunities” Tedeschi (1999:1) [Online]

A more recent study by Liao (2009) continued with this theme, saying that retailers see great potential in an Internet presence, however focus their research on factors affecting customer adoption of the growing Internet offering. The study noted that customer would be driven by factors including the perceived usefulness and ease of use, coupled with accessibility to a local retail market and concern regarding risk. The study reports findings including:

On the upside, customers who are further afield from local retailing outlets will be more willing to adopt new technology to ease the task.
On the minus side, customers may still be unwilling to input personal details online find online financial transaction unsecure or may find it hard to navigate through the selection, instead choosing face-to-face and traditional stores.

One remark, which was noted, was that the study concluded that in a bid to remain competitive, traditional retail outlets should consider a niche, and focus on personalisation to remain competitive.

In terms of marketing, as online competition has increased, so has the level of marketing to attract custom. Given the reduce business costs when compared with the bricks-and-mortar agents, company’s such as Expedia and Trivago have embarked on advertising in terms of social media, TV-advertisement and print campaigns to increase customer awareness of their offering.


Given Liao (2009) remark on a niche market, this section will focus on the corporate travel sector, information, which can be used to aide in answering research question three.

A recent report from PhoCosWright (2013) identified that the corporate travel segment continues to move more online as businesses seek greater cost-control over their travel expenses. However, the report did highlight that as larger companies seek to reduce costs, there is the opportunity for travel agents to increase business, given that some companies will require the management and assistance that comes from the traditional face-to-face travel agent.

Recently Expedia, through its travel business Egencia, launched the Autobook tool in 2013 to US customers, allowing companies to plan more corporate travel themselves. The tool also reduces the risk of price increases and the loss of available flight seats, hotel rooms by streamlining the approval-to-purchase process. Expedia also introduced the tool for Mobile devices, a major benefit in the corporate travel market.


Again, given the suggestion of focusing on a niche market, this section will delve into the up-market travel segment, considering opportunities for the traditional travel agent, aiding in answering research question 3.

The up-market travel segment has gained some attention with corporate travel, again due to the greater need for customer service and knowledge. Harris (2005) noted that the future prospects for ‘niche’ travel agents were greater, citing the up-market segment, as customers require greater face-to-face knowledge and expertise given the amount of money they are willing to spend. While the research noted that online competition is growing and does pose a threat, it also concluded that customers are still less willing to book online as the total cost increases, meaning that up-market offerings are a potential growth-spot for the traditional travel agent.

An article by Weber (2013) [Online] focusing on the US market, mentioned that while US traditional travel agents has fallen to around 13,000, from a peak of 34,000 in the mid-1990’s; a new breed of agent was thriving, that target luxury, business and niche travelers. The article mentioned that while the point-to-point holiday (also described as package holiday) was continuing to move onto the online platform, luxury travel remained traditional based as the customer simply wants someone to talk to, mentioning that these travelers usually fall in the older-age brackets and have less competence with the online platform. Given this, the articles concludes that the traditional bricks-and-mortar travel offering will remain sustainable and relevant in the traditional market, citing increasing wealth and ageing population in developed markets as reasons for future growth. Cheung (2009) adds into the discussion and mentions that up-market travel does require a face-to-face agent as it is less of a impulse buy for a customer; given the cost, the customer will expect greater detail and planning involved. The research also adds that wealthier customers may be more time-constrained given work commitments, which may see them turn to a travel-agent who can plan their trip and present them with a total price.


This section will consider the movement online by the traditional business, providing support for research question one.

As the Internet offering develops and becomes more influential in the travel market, a number of traditional travel agents have moved the offering online to compete. By using the Internet, companies such as Thomas Cook, First Choice and Thomson are now able to display their offerings to the online consumer, who are now able to compare their prices with other agencies and websites. The main reason why this move has become ever important is the addition of price-comparison sites; these sites have enabled consumers to now compare prices of flights and hotels from a number of sources, including the suppliers themselves, USAToday (2005) [Online]. As a result, the travel agent, who was once able to charge a premium to consumers for putting together their holidays, are now faced with competition that allows consumers to go direct to the airline/ hotel and get a price with a ‘no middle-man’ concession. At the time of the USAToday (2005) article, market researcher PhoCusWright (2005) found that customer perceptions of supplier-direct sales had improved over recent years. In 2004, 45% of online travelers said Internet agencies had the lowest price, down from 58% in 2002. Meanwhile, 30% of online travelers said suppliers offer the lowest prices, up from 14% in 2002. It is also important to mention that the other answer available to respondents was the traditional travel agent, which in 2004 only received 25%.

To combat this move, a number of agents have adopted online platforms, which they hope would complement their store offerings, Lobe (2012) [Online]. According to Lobe, the role of the travel agent is still important, being quoted as saying:

“There are always things that a machine cannot replace a human for. For example, a travel agent will be able to provide insider travel tips, get bulk discount or amend travel dates when unforeseen circumstances crop-up”

In the changing online experience, even market leaders such as Expedia are continually developing the product offering and marketing tools to remain competitive. Recently Expedia unveiled several new features to its site in a bid to improve the travel planning process, a way in which Expedia can improve competitiveness with online competitors, but also a way in which Expedia can make the traveler feel like they are getting a personal service, somewhat replicating the unique selling point of the traditional travel agent. According to Expedia (2014) The three new offerings, ‘Flight Recommendations’, ‘Scratchpad’ and ‘Itinerary Sharing’, utilises user data to analyse search and booking patterns, in an effort to streamline the customer experience and make the process more personal.

‘Flight recommendations’ analyses previous flight searches from the website and applies the data to customer searches, suggesting alternative dates, times and airports to provide the customer with more choice. ‘Scratchpad’ stores and organizes customer searches and queries, allowing them to visit at a later time. This tool was developed after Expedia noted that the average customer search for a flight on average 48 times before booking – the new tool will save time for the customer. Finally, the ‘Itinerary Sharing’ allows users to share their itineraries with family and friends. According to Expedia Senior Vice President John Kim:

“Flight Recommendations utilises our flight booking data to help travelers find the best flight at the best price available. Scratchpad makes it easy for travelers to log all their options. We eliminated the hassle of tracking. Scratchpad remembers searches so customers don’t have to. Itinerary sharing makes it easy for customers to share their live data with others. We are making travel easier,”

Kim (2014) [Online]

Given the information above, the online marketplace will continue to develop from all angles, with a focus on improving the customer experience through new tools and technology. Operators will also continue to make greater strides into the mobile-device market too to ensure that customers have access anywhere, at anytime. While traditional travel agents will remain relevant in the marketplace, the information given above suggests that strides into an online-presence and mobile platform will help the business remain relevant and so competitive in the changing environment.


One factor that has become apparent from the studies above is adoption of an online platform will differ greatly for different businesses. For example, Law et al (2004) commented that the Internet provides suppliers the ability to sell their goods and services on a global scale.

This advantage may be felt by suppliers such as airlines and hotels who can sell the offering worldwide; for example, British Airways could benefit as it could sell its flights direct to customers in the US, Europe, Asia rather than using third-parties. However, UK-based travel agencies would feel little benefit from this factor as there would be little demand in say, the US, for package holidays to Spain that depart from UK airports. To add, smaller agencies may find little benefit in opening up their offerings to a much larger customer base, as they may simply not have the supply to meet a surge in demand. Furthermore, if they were a local agency, focusing on customers in one town or region of the UK, there would be little need to the company to expand into an online platform. In these scenarios the agent would need to weigh up the benefits of potentially increasing business in their geographical area coupled with the capital needed to set up and maintain an online platform.

Given this, smaller, local agencies may consider using resources to lengthen opening hours, provide phone support, and increase marketing to increase penetration in its geographic area rather than marketing to a national / global level by developing an online platform. As shown above, the online offering is become more competitive as companies spend money improving website tools and features to make the customer feel personal and increase customer service, a bid to replicate the unique selling point the traditional travel agent was built upon.


Mintel reports provide a third-party, in-depth look into the UK travel market. The benefit to these reports is that they are released on a yearly basis, allowing for comparison over a number of years on the changing sentiment in the market.

“As the advent of concept stores shifts the role of stores towards offering an inviting experience rather than just facilitating transactions, travel agents need to avoid declaring a given store a success or failure based on in-store sales. The maintenance of a loss-making, but high-footfall store should instead be viewed as a marketing cost, helping to build brand strength and awareness and boosting sales through other channels.” Mintel (2013: 3)

Mintel (2013) highlighted that the movement online would speed up in the coming years as the continued penetration of smart-phones and tablet computers mean more consumers have access to the internet at anytime and so would be more willing to use the Internet for travel purposes. Previous reports have backed up this movement, with Mintel (2012) highlighting that in earlier years, the traditional travel agent has been buoyed by a misconception that they offer a greater level of consumer protection than the online platform; confusing ABTA membership with ATOL certification. The report highlighted that the collapse of a number of travel-agents over the period of UK recession, highlighted the need for ATOL certification, highlighting customer attention and pushing more demand onto ATOL certificated online-offerings, including Expedia. According to Mintel (2012: 2)

“With this myth dispelled, the decline in usage of high street travel agents will likely be accelerated as consumers let price rather than misconception guide their booking process.”

Apart from reports on the travel agencies, Mintel also produce a number of reports on the travel market. These provide interesting additions to the study as they monitors the habits of UK consumers and their travel choices. In the most recent travel review, Mintel (2014), mentioned that trends in the UK travel market has been affected by the recent recession, pushing more demand onto in-store sales as consumers look for financial protection, as mentioned above. However, the report also mentioned that travel agents has been buoyed by an increase in demand for packaged all-inclusive products, as cash-strapped consumers look to control their spending, an area that traditional travel agents have been known for. Again, the report mentioned that in the long-term, demand should again focus on the online-offering, with the continued development in the area supporting the movement.


While some researchers have forecasted that the traditional travel agent could be replaced by the online offering, these forecasts have so far proved un-met. From the literature review performed above, it appears that the majority of recent studies expect the traditional travel agent to complement the new online offerings, it can be noted that the majority of research forecasting the doom of the traditional travel agent, was from earlier years, such as, Sheldon (1997) and Buhalis (1998), when the Internet was relatively new for business and seen as the major game-changer, pre-dotcom boom. Since then, recent studies have suggested that the traditional travel agent continues to offer the human touch as its unique selling point; travelers still rely on traditional agents for professional advice for reassurance and face-to-face interaction.

Taking the views into consideration, it appears that both traditional and Internet travel agent can coincide in the future, complementing each other. Information on the Internet may provide travelers with new information and destinations that the traditional travel agent could meet, while advice from traditional agents may provide customers with the confidence needed to go and book online, where travelers could take advantage of the extensive choice and price-focused environment. Rob et al (2004) mentioned that in the future the market would be a 50/50 share between traditional and digital; while recent movement may suggest higher Internet penetration, the case still remains that both platforms have advantages/ disadvantages that support a co-existence in the marketplace.

Bricks-and-mortar continues to benefit from the higher levels of customer service and face-to-face interaction they can provide, giving them a unique selling point in the market. Given this perceived quality in service and opinions, consumers will continue to seek travel agents for advice on travel plans, with segments such as corporate and up-market travel tied more to traditional agents given the increased need for information, assistance and flexibility within travel arrangements. This finding provides back up for research question two, indicating that by moving into a niche market, such as up-market travel, the traditional travel agent can provide a buffer against increasing online competition.

While Clicks-and-mortar will continue to benefit as the product offering increases and some traditional agents move to a dual-platform offering, one apparent disadvantage will remain; being the failure of technology in terms of payment security. While online payment methods have become more sophisticated over the years, recent data thefts from major online platforms have re-enforced the risk of online payment. Given this, some consumers may be unwilling to book their travel arrangements online, seeking out travel agents for face-to-face payments. Furthermore, while Internet platforms such as Expedia have focused on increasing customer service through the introduction of ‘Live Help’, these developments will still fail to compete with the service level that can be provided face-to-face. Given this, the main competition from the Internet is the growing selection of product offerings, ability to personalise holidays and the price which can be offered, given the lower costs associated with an online platform, (Rayman-Bacchus, 2001).

To expand greater on the growing attention on personalization, a number of examples have been found. For example, Expedia (2014) now allows customers to add excursions, car-hire, and transfers onto their holiday, while supplier-direct sales have been buoyed by a wide-range of extras, which hotels in especially can offer as an exclusive. For example, take the Atlantis in Dubai, a popular hotel among travelers that can be booked through a number of channels, including Thomas Cook and Expedia. While these channels can offer a good selection, the hotel can also be booked through the official website, providing customers with a number of possible additions to make their visit personal. To add other suppliers have gone further such as the Hotel de Paris in Monte Carlo. Renowned for its opulence, the hotel allows guests to add champagne, chocolate, concierge services, private-car hire, flowers onto the room, providing the ultimate opportunity for customer personalisation.


The case study will be used to provide detailed analysis of Thomas Cook’s foray into an online presence and the change this had on its traditional, high street travel business. The case study has been chosen for a number of advantages (detailed below), Fisher (2007). The study has also undertaken an interview to help mitigate some of the disadvantages of a pure case-study project; it is hoped the two together will provide the information needed for a structured and supported conclusion.


A case study allows for in-depth analysis of one area/ company, allowing for research to go deeper into the subject. The data that is collected is usually much deeper than could be collected through numerous samples, due to time-constraints and access to information.
Case studies are beneficial when large samples of similar participants are not available. While Thomas Cook has information that is easily accessible and relevant, a number of smaller agencies that maybe do not have investors or an online presence would prove difficult, meaning multiple interviews and contacts, which may in the end not be fruitful. Focusing on one company allows for greater detail to be achieved.
A case-study will help in developing a greater understanding of Thomas Cook, which will be beneficial when undertaking the following interview with management at a local high-street store.
The main benefit to this study will be the addition of detailed knowledge, Fisher (2007).


One disadvantage could be that the knowledge collected could not be generalised to the wider population. For example, in terms of Thomas Cook; as the company is much larger than smaller, independent agents, their development into an online presence maybe much slower than of Thomas Cook. This, along with other factors, may mean that the recommendations concluded on future marketing strategy may not appeal to all travel agents. However, the study will use researcher knowledge, along with the literature review and interview to clearly identify the difference between larger/ smaller agents.
The disadvantage of bias could appear in the case study as one researcher undertakes it; however the literature review and following interview will be used to help mitigate this disadvantage, Fisher (2007).

The interview will take a semi-structured approach; the interview will give some set questions to answer, allowing for the research questions to be answered. The questions will be ‘open’ rather than ‘closed’, allowing for a more in-depth conversation to follow into the future of the travel agent in the face of increased competition and a changing marketplace. The opinions/ thoughts provided by the interviewee will then be compared with the findings of previous studies to determine a trend, adding new findings to the body of research. Furthermore, as most previous studies have focused on traveler (customer) views, the introduction of opinions from travel agents themselves will allow for the following discussion to provide comparisons and similarities.

An interview is classed as a verbal exchange, Ritchie & Lewis (2003); with the effectiveness depending on the communication skills of the interviewer and their ability to structure questions, listen attentively, probe and prompt appropriately and most importantly, make the interviewee fell comfortable and encourage them to speak freely, Clough (2012). Interpersonal skills identified by Opie (2004); such as the ability to establish a friendly relationship with the interviewee, will allow the conversation to delve deeper into the issues. The research identified one key problem being that the interviewee may be unwilling to downgrade the performance of their business and provide data, which may suggest that the travel agent is underperforming due to the changing marketplace. Ultimately, the identification of this project led to the decision to choose a semi-structured interview over structured, allowing for the interviewer to probe deeper in a subject that would benefit the research. Furthermore, the problem also identifies the importance of ensuring the interviewee feels comfortable; to improve the environment for the interview, it was suggested to each interviewee the interview took place in a social environment, such as a coffee outlet. By doing this, it removed the interviewee from a work environment, where they may have felt less open when discussing business issues. To add, by holding the interview in a social environment, the interviewee will feel re-assured that the discussion taking place is informal and more of a ‘chat’ rather than interrogation.

Given the above, it was determined that the research will predominantly use qualitative data over quantitative. While quantitative data is beneficial in statistical analysis and also for collection of large-pools of data, neither of these fit into the above methodology. Given the need for explanatory and in-depth responses, qualitative data was required, (Merriam, 2009). Furthermore, given the focus on quality of responses over quantitative, it was concluded that the time required to compete both the case study and supporting interview was available.


The case study will focus on the development of Thomas Cook in the UK, looking into development of the online platform to create multi-channel business. Thomas Cook has been selected, as it has been the frontrunner in terms of building an online presence. By understating the marketing strategy used, this study can then draw on previous successes to present findings on the future marketing of travel agents. This will benefit in answering research questions one and two.

According to Thomas Cook’s latest Interim Management Report, February (2014), Internet sales accounted for 36% of holiday bookings in 2013, up from 34% in 2012 as the company continued to focus on its online platform. According to the report:

“Significant progress has been made to integrate the web platform and enhance content to enable increased online penetration and achieve our target of more than 50% by FY15” Thomas Cook (2014)

This compares with rival TUI Travel, who currently have a 50-50 split between online and traditional store sales. In a bid to facilitate the movement to an online platform, Thomas Cook (2014) [Online] identified they need to ensure the brand values remain with the high-tech improvements. According to Thomas Cook:

“Trust, consistency and a strong brand are the most important drivers of customer choice”

They go on to say that while 70% of travelers want a relationship with their holiday provider that goes beyond booking/ paying for the trip, a massive 93% of travelers either search for content online or express a preference for booking online if possible. However, providing back up to the prior literature review, the company also stated that 50% of travelers feel overwhelmed by the amount of information and choice when booking online – with 66% of travelers requiring help in choosing the right product for them.

The information above details an environment of increased web penetration, however, coupled with a continued effort to keep customer service and a personal touch to ensure the brand remains intact.

In a bid to ensure the above is supported, Thomas Cook have recently focused their strategy on the implementation of the ‘Dream Capture’ system – their opportunity to develop a multi-channel sales network to compete effectively with the major online competition from Expedia. According to Thomas Cook1 Annual Report 2013 (2014:40):

“This digital innovation replicates search facets for the retail environment, linking the customer experience across all channels – from in-store to online – and allowing customers to decide how and when they interact with us when booking their holiday. Our retail consultants will use this customised service to build a shortlist of personalised holiday experiences that meet the specific needs of their customer. The customer can then access online giving them the choice of booking online, via the call centre or by going back to the store, thus linking the customer experience across all channels – whether it be retail or e-tail.”

The benefit to this system is that customers can get the benefit of every channel; customers can visit the traditional travel agent for advice and assistance in planning a holiday, which is then saved onto an account. The customer then has the ability to go home, consider the holiday and book on-line at a time to best suit them.

However the movement undermines the current level of traditional travel agents needed. Given this, Thomas Cook has continued to reduce store numbers as it ups its high-tech offering. In its 2013 Annual report, the company announced that a further 195 travel agents had been closed, taking the total number to just 874. However, even at this level, the company still has more stores that rival TUI Travel, who has about 700, signaling the potential for more store closures. The company also announced that stores that remain open will be re-developed into high-tech stores, giving customers access to their internet platform. On release of this update, Graeme Smith, from advisory firm Zolfo Cooper, said that the retreat from the high-street was “sad but not unexpected”, mentioning that the improving online offering from Thomas Cook will be a counterweight to the Online travel agencies of Expedia and, BBC Business (2014) [Online]. In full Graeme Smith said:

“Thomas Cook’s retreat from the high street is sad but not unexpected given the dominance of the Internet now in the mainstream travel market. Other areas of the travel sector are growing – particularly those aimed at over 50s, students and specialist niche experiences”

This provides an opportunity for the traditional Thomas Cook, in particularly with the older segment, which will be less confident in using online platforms. Furthermore, the addition of niche holidays may place more demand on the traditional travel agent due to the complexity of planning/ managing the trip. For example, in the student market, STA Travel has remained a key-player due to its multi-channel operation, were students/ young people can book online, on the phone or through stores. To add, Mintel (2011) highlighted that in the long-term, travel agents have opportunities as more countries open up to the benefits of increased tourism, highlighting the Middle East and Africa. Traditional travel agents could play an increasing role, as consumers would have greater need for information and advice, given the greater risk these countries have experienced in the past. As mentioned throughout, the unique selling point of the traditional travel agent has always been the face-to-face service and re-assurance that customers can receive, an added benefit when customer would be wary of the destination to visit.

At its peak, Thomas Cook had over 1,200 outlets after its merger in 2010 with the Co-Operative’s travel business, Blitz (2013) [Online]. As mentioned, while this is expected to further decrease as web penetration heightens, traditional travel agents will still remain on the high street – a multi-channel business as suggested in the literature review.

In term of marketing, Thomas Cook have used the new online platform to increase the level of new products and destinations; one major benefit to an online platform is the limitless space available, allowing the operator to greatly expand the level of information available. In the past, customers found new destinations by looking through brochures in bricks-and-mortar agents; however, the Internet has made it easier for marketing to entice customers. For example, the Thomas Cook website offers the ‘Inspire Me’ section, which includes information on new, up-and-coming destinations that customers may not be aware of. This tool is also used on Expedia and as well as airline suppler sites such as EasyJet.


The interview undertaken will be semi-structured, allowing for the researcher to ask additional questions to obtain further information on an interesting topic. However, to ensure that the research questions are met there will also be a number of set questions that link directly to the research questions including:

Does the Internet offering of travel/ airline products affect your businessIf so, to what extent
Aside from the Internet, does your business see any further risks that may affect demand in the coming years
In your opinion, how have customers reacted to the new influx of Internet websites, including Trivago, Skyscanner
Has your business changed its offering/ marketing in a bid to compete with the Internet


The following information was obtained from the interview with Thomas Cook, which took place on 14th February 2014. Below is a snapshot of the relevant responses from the management team at a local Thomas Cook travel agent.

Researcher – Does the Internet offering of travel/ airline products affect your businessIf so, to what extent?

Interviewee – “Of course the Internet has had some effect on our business; we now find that customers are less willing to purchase their holidays immediately with us. After they obtained details on flights and hotels from us, it is my opinion that they then go off and compare the price given with what they can get online. With this, I would say that we only see around half the customers/ provide details return to us to book their holiday.”

Researcher – Why do you think they come to Thomas Cook and other traditional travel agents in the first place if they can go online?

Interviewee – “I think the main reason is the personal touch and face-to-face interaction. While the offering on the Internet has got much larger, these sites are still unable to offer the personal touch and opinions that our advisors can. Sometimes we get customers come to us who have looked online, but are confused by the vast amount of choice available and the range of traveler opinions.”

Researcher – Do you think the addition of customer review sections and comparison sites have increased this issue?

Interviewee – “Defiantly! Taking comparison sites first, while they have added massive choice to the market, allowing consumers to book through a number of agents and also directly with the supplier, the main problem has been differing terms and conditions. For example, some of the prices include taxes, some don’t, and some include breakfast, while other doesn’t. Due to this, some customer have commented they feel reluctant to book through these sites as they are not 100% sure they are getting the holiday they want. Travel agents are then used as the customer gets the reassurance that the professional has listened to their requirements and built a package best suited to them. Again, it’s the face-to-face interaction, which is a unique selling point of the high-street travel agent.

Moving onto customer review sites, while customers have again found some benefit from sites such as Trip-advisor, the recent explosion in reviews has become too much. Instead of being helpful, we are again finding that customers are just confused over where to stay, destination, nearby restaurants and attractions as they spend too much time reading each review. Having a face-to-face travel agent, who will spend time going through the options and local amenities ultimately, helps customers make their decision.”

Researcher – Given your last answer, do you feel that high-street agencies and the Internet can co-exist in the travel market?

Interviewee – “Yes, I see that as one of the major movements in the future. Thomas Cook already has a strong online presence, and we do usually get people come in who have viewed our deals online and will come into to book through our agents for clarity and their peace of mind.”

Researcher – In terms of the Internet, who do you see as your biggest competitor?

Interviewee – “Apart from our high-street rivals (Thomson, First Choice) who also have an online offering, I see the biggest rival as Expedia. The site was one of the first to really break-through into the online marketplace and has continued to expand and develop to meet the growing needs of customers. The main advantage Expedia has is its focus on allowing the customer to quickly personalise their holiday in terms of availability of flight times, hotel destinations, adding extra’s. Expedia is defiantly the most developed traveler sites I have come across.”

Researcher – Aside from the Internet, what are the main challenges facing travel agents in the coming years?

Interviewee – “One of the main challenges is cost-reduction. As you would have seen from Thomas Cook, the number of high-street stores has been declining, as they are unable to remain competitive in the current environment. The Internet has played its part in reducing costs; to compete; Thomas Cook has reduced their prices too, leading to falling margins in many stores. While we have remain profitable from our exclusive hotels and our own charter flights, we have lost out on some of the new, long-haul destinations as customers are now able to book from the suppliers themselves, taking out our commission.

Another challenge is the new influx on international destinations; again the Internet has played its role in educating customers of global travel destinations, which means we are now receiving more and more queries into destinations such as New Zealand, Malaysia, Brazil to name a few. To remain competitive, Thomas Cook is having to quickly increase its product offering, however as mentioned above, the addition of supplier direct sales through the Internet is affecting the potential pay-off from adding these destinations to our product mix. It is the younger generation who are looking into these destinations more, people who are more skilled and knowledgeable of the Internet.”

Researcher – Given the new conversation, how has Thomas Cook changed its offering/ marketing to remain competitive?

Interviewee – “As mentioned, Thomas Cook has increased its destination offering to appeal to a new generation of travelers. I see one of the big drivers of future growth as appealing to travelers with more exotic locations. Travel agents used to be centered on the ‘package holiday’ to European hotspots, however the influx of Internet sites have increased competition a lot in this area. If we add the fact that the current situation in the UK economy has meant that some people have restricted their foreign holidays, they we see too much supply in the market.

Now be focusing on the more up-and-coming regions, we are able to tempt more people into our stores, so for example, currently we have focused on some new US destinations and on the Middle East. We are finding these destinations are selling well as customers are just finding out about them so may be more reluctant to book online and would require the services of one of our agents. Destination such as Spain, Turkey, and Greece are becoming more easily booked online as customers have greater knowledge of the region from previous visits or from information from family/ friends, while up-and-coming regions are seen as more ‘scary’ for customers. They do not know where the main area is, the bars/restaurant/ attractions are located and thus are more likely to seek the help of a travel agent.

Furthermore, one of the main growth areas will be the rollout of our ‘Dream Capture’ system, which will allow customers to manage their holiday booking through all our retail channels. This will build upon the online platform but will also cement the need for high-street stores to remain”


This section will now consider the implications on smaller agents, such as JP Travel. The focus on Thomas Cook above has shown that a key-part to the company’s new strategy is the development of a dual-platform offering, allowing the company to compete with both high street and online competitors.

However, larger agents such as Thomas Cook have the ability to undertake this move, given their national presence and large product selection. The movement online for smaller agents such as JP Travel is less appealing; given the time and cost to develop an effective online-platform. If the agent did foray to an online presence, the best option would be to use the platform as a marketing tool, rather than offering online purchasing. The platform could be used to inform customers of the in-store offering, while forays onto social media such as Facebook, Twitter and Instagram could also provide a cheaper/ faster alternative for agencies such as JP Travel to gain more customer attention.

The case study also mentioned that Thomas Cook saw expansion into new destinations as a key growth market; however, it must also be mentioned that its nationwide store network, greater consumer reach and also its online platform will support this movement by Thomas Cook. When considering smaller travel agents, who may just have one store, the key for development will be specialisation. While smaller agents could offer more up-and-coming destinations, they must be more selective in their choice for the following reasons:

Smaller agents have less customer reach; given this they may find it hard to sell a wide-range of new destinations. Furthermore, the diversity of the customer base may be lower, which will impact on customer’s preference for destinations. For example, if the area has a large African population, the agency may choose to specialise in African destinations/ flights to appeal to the local demographics.
Smaller agents will typically have less staff, by specialising on a select number of destinations; staff can be trained up with expert knowledge of the destinations, supporting the service quality and unique selling point of traditional travel agents. Too big of an offering may impact on staff expertise in the area, which would affect the level of service they provide.

Given the two points mentioned above, smaller travel agents can take idea’s for development from larger rivals; however, these changes must be done on a scale that reflects the individual business.


From considering both the case study and interview, it appears that Thomas Cook will continue to improve its online offering through the development of the multi-channel ‘Dream Capture’ system. The importance behind this is that it can effectively offer something unobtainable to online competitor Expedia, a face-to-face service coupled with high-tech online offering.

The literature review highlighted that more recent studies had concluded that the traditional travel agent and the new internet offering can co-exist in the marketplace as consumers seek more choice and information but also the level of support that can be provided face-to-face. This was also supported by the case-study and the Interview as Thomas Cook focuses on the roll-out of the ‘Dream Capture’ system, which will be a co-operation between all Thomas Cook’s platforms. It was also expected a number of store closures reflected Thomas Cook’s recent takeover of the Co-operative travel, leading to some area’s served by a number of Thomas Cook stores; the reduction in store numbers would have been to reflect this in-efficiency.

The interview with Thomas Cook store management also supported both the case study and literature, mentioning that while the Internet has become a larger competitor over the years, the traditional travel agent still retains its unique selling point, though the level of customer service it can offer. The interview did bring-up a number of interesting comments, which added depth to the research. To start, it was mentioned that while the Internet has increased customer knowledge of global destinations, increasing the potential for new markets; it was mentioned that these travelers are of the younger generation. As a result, these consumers may be more comfortable with using the Internet for both information/ advice and booking, dampening future opportunity for traditional travel agents. Mintel (2011) highlighted the potential for new destinations; however the report has also mentioned the offering of Expedia and also STA Travel, which focuses its operations on students and young-travelers, has the potential to expand given the influx of new destinations.

The interview also brought up that consumers are now becoming more confident at booking ‘package holidays’ such as Greece, Turkey, and Spain online as they may already have knowledge of the destination from previous visits themselves or from family/friends. Given this, it appears that the traditional travel agent must increase competition in long-haul destinations, even with the competition mentioned above. The main opportunity here is to entice consumers away from the well-known destinations mentioned.

Bringing in the research questions, it has been shown that travel agents are able and have entered into an online platform, with a focus on integration with the current bricks-and-mortar offering. However, it was noted that the ability and justification to enter an online platform would depend on the individual agent and the factors driving the movement, including size, product offering and customer scope. It was mentioned that smaller agents such as JP Travel may consider using the online platform primarily for marketing purposes, focusing on social media or a small-scale website, while larger, nationwide agents will find more benefit in offering purchases online.

In terms of question two, the research has suggested a number of improvements that could be made by travel agents to remain competitive. A focus on specialisation and ‘niche’ markets was deemed to be an attractive solution for smaller travel agents. To be successful, the research noted that the smaller agents such as JP Travel should consider their local demographics (age, income etc) to determine the chance of specialisation.

Research question three focused on the methods that could be used to support the product offering/ service. Given that that research determined the main strength of the bricks-and-mortar agent to be the level of face-to-face service they can provided, agents should continue to develop their service and knowledge to attract customers who may feel overwhelmed by the Internet offering. Destination knowledge will be key when offering new destinations; smaller agents should ensure that they develop sufficient knowledge to support a movement into a niche market.

Research question four focused on other factors that are currently affecting the travel market apart from the Internet. Various Mintel reports noted that the economic downturn has a positive impact on the traditional travel, however a return to growth in the coming years may push more consumers away from the all-inclusive, package holidays. While travel agents should combat this through adopting a ‘niche’ offering, this could create high competition in a small market, which would then lead to higher spend on marketing and lower prices, affecting margins in the market.


The above discussion has some implications for the traditional travel agent. As all sources have suggested, the increased Internet offering is adding competition to the travel market, supported by its ability to offer lower prices due to reduce capital costs for the business (online platform Vs. high street presence).

As major agents such as Thomas Cook and Thomson move into dual-platforms to remain competitive, the question of in-store marketing becomes an important prospect to both large and small travel agents. One benefit the traditional travel agent possesses is there presence on the high street and so direct-marketing potential with passing consumers. While agents such as Thomas Cook and Thomson have the ability to market their ‘digital’ presence in their windows (Internet, Mobile), giving consumer’s access to greater company information and products, smaller travel-agents may consider the following points, derived from the prior research:

Specialise – use the limited high-street marketing place to advertise specialised destinations and products. As mentioned, consumers may feel more comfortable booking destinations they are accustomed too over the Internet, and further, may consider the Internet a cheaper alternative. By advertising ‘niche’ destinations, the consumer would be more willing to seek professional information/ advice, which as shown in the research, is still the unique selling point of the traditional travel agent.
Personalise – Many online tools are focused on a DIY, self-service tool, allowing the consumer a great choice of offering, however also limiting their chance to personalise their holiday. Travel agents, again through increased customer service and knowledge, can help the customer personalise their holiday with recommended trips, additions etc. The travel agent should make these services clear through the advertisements, providing potential customers with re-assurance.
Develop Unique Experiences/ Special Access – Some travel agents have focused on obtaining special access to hotels/ activities to attract customers. For example, Thomas Cook and Thomson both operate their own hotels, with some providing on-site activities such as water parks to attract customers away from competitors. While it would not be economical for smaller travel agents to invest in large-scale hotels, such as Thomas Cook, they do have the ability to form partnerships/ deals with small trip operators/ activities, which should support the above point of specialisation. For example, if an agent focusing on holidays to Kenya is considered, the agent may make deals with local guides/ services/ activities to give them exclusive access. This then supports the travel agents move to specialise, offer personalisation to customers and also to support their unique selling point. Advertising these ‘exclusive access’ options, customers will be attracted to the agent but also feel re-assured that the agent has sufficient local knowledge to plan their holiday.
Go Complex – Advertising should not be wasted on point-to-point trips; as mentioned, consumers are becoming more confident in booking ‘easy’ trips online, such as package holidays or just a flight/ hotel, giving the increasing presence of Expedia, Trivago etc. High-street travel agents should tailor their in-store marketing to reflect a more complex offering, such as longer international trips, multi-city/ multiple stopover destinations and cruises; as again, all these choices require greater knowledge and personalisation, supporting the selling point of the traditional over the Internet.
Focus on Market Segment – Given that smaller travel agents would find it harder to compete with the online heavyweights, they should tailor their offering to focus on a specific market segments, tailored to their local area. For example, a smaller travel agent centered in Kensington & Chelsea, London, may tailor their offering to the up-market clientele. With this, the travel agent can then specialise their advertising to match destinations/ services that this clientele may require such as business class travel, private cars, and exclusive accommodation. One example of this is the travel agent Kuoni, a good example for market specialisation.

The study set out to determine the future of the contemporary travel agent, with specific interest in marketing. From the literature review, it was concluded that the majority of recent studies (<10 years), saw the co-existence of both an online platform and traditional travel agent given their own benefits/ disadvantages; the Internet had the benefit that a customer could view/ book their holiday at any-time, best to suit their needs, while also competing effectively on the price due to lower business-costs. The following case study backed up the literature and found that while the company has continued to cut high-street stores, the company is pursuing a multi-channel operation, focusing on the roll-out of its ‘Dream Capture’ system, allowing both the online platform and traditional stores to interact and co-exist. Finally, the interview complemented the findings and supported the view that both the Internet and in-store offerings could go exist as ‘Clicks-and-Mortar’, penned by Bernstein et al (2006). If the traditional travel agent does look into expanding their presence online, this should be undertook in a manner than integrates with their current in-store offering, allowing for multi-channel distribution, using the movement by Thomas Cook as an example. Research from Choi (2005) focused on bricks-and-mortar agents who have an online presence, finding that the vast majority of websites were being used as ‘electronic brochures’ rather than being presented as an integrated distribution and marketing channel. Given their size, the research concluded that these websites had weakness in attracting new customers and generating a substantial profit.

The researcher does understand that the ability to do the above will be dependent the on the size and scale of the travel agents and its business – below are a number of suggestions that could be used to tailor a future competitive offering.


Large travel-agents need to focus more on the movement into an online presence, while also considering the development of ‘App’s’ allowing customers to view on both their Tablets and Mobile Devices. Due to their larger size and greater public awareness, consumers will become more demanding and expect an online presence in a more-connected environment. While consumers who favour the traditional travel agent will continue to use their services, their increasing desire for more information and access to information 24/7 will drive the need for the traditional to invest in the high-tech to remain competitive.
While these developments will incur a cost to the business, making the investment by smaller, one-shop agent’s unjustifiable, larger regional/ UK/ Global agents will benefit from the potential of added marketing tools and increased presence of social-media (eg. Twitter, Facebook), making the initial costs justifiable.
As mentioned some smaller, one-shop travel agents may find developing an online presence hard to justify based on the costs needed compared with the size of the customer base and potential growth. These smaller agents may find it beneficial to make small steps into an online presence through a page on social media sites such as Facebook, LinkedIn (corporate travelers). By doing this, the company could use this presence as a customer service portal, whereby customers can post questions 24/7, helping to alleviate one benefit the online agents have over traditional agents.
Smaller travel agents may benefit from establishing a ‘niche’ and specialising in up-and-coming markets, as while these destinations will be of increasing interest, consumers would require more information and advice when booking due to previous wariness and uncertainty over them.
All travel agents should focus on tailoring their marketing to entice customers into new destinations or in supporting new developments into a ‘niche’ market. For example, take Thomas Cook and Thomson; in terms of TV advertisement, Thomson has focused their adverts on ‘couples-only’ offerings while Thomas Cook has focused on its ‘exclusive’ resorts.


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