The number of travel agency and tour operators going insolvent has fallen by 30% in the last five years from 47 to 33 per annum, as the “impact of the internet slows”.
According to accounting firm Moore Stephens the internet revolution of the last two decades has “thinned out the less financially stable businesses”, leaving those whose business models are “better insulated against the threat of consumers buying DIY holidays”.
The group added that despite the fall in annual insolvencies the market for travel agencies is still “challenging and inherently uncertain”. Increased competition and new technology platforms, particularly from the likes of Skyscanner and Airbnb, continue to make it easier for regular holidaymakers to ‘self-organise’ their travel without the need for an agent.
Chris Marsden, restructuring and insolvency partner at Moore Stephens, said: “Travel agencies are performing better than they have been in recent years. New technology platforms and the evolving expectations of travellers have revolutionised the way the sector works.
“The market is both challenging and continually evolving, and agencies must fight to stay relevant against online-only competitors. Building customer loyalty by creating a bespoke experience through knowledgeable staff face to face is of paramount importance.”