With one of the biggest names in UK travel exiting the market, there's space for other travel firms to pick up some of the travel demand. It's not going to be easy with plenty of Brexit uncertainty in the market as well as lots of competition.
Thomas Cook’s exit from the UK market has left a pretty big gap to fill ahead of the peak post-Christmas travel booking period.
A number of brands are looking to fill the void, including the Travel Leaders Group-owned Barrhead Travel.
The travel agency chain started off in a suburb of Glasgow, Scotland and has expanded over the years to other parts of the UK. With Thomas Cook out of the way, the CEO of Barrhead’s parent company believes the time is right to “turn the dial up on our expansion.”
To fuel the growth, Barrhead has brought in ex-Thomas Cook staff, including the former head of its UK business, with an ambition to add up to 100 more stores to its existing network of 76.
“With Barrhead we always had organic expansion plans. I think all that’s changed post Thomas Cook is we’ve gone orders of magnitude higher on our expansion, while still being prudent about where and when and how we’re going to do something,” said Travel Leaders Group CEO Ninan Chacko.
Thomas Cook collapsed at the end of September after failing to get a financial rescue plan over the line. The company operated hotels, airlines and travel agencies across Europe with a big presence in the UK market.
After its demise, Hays Travel bought its 555 UK retail outlets and rivals such as TUI Group and Jet2 have moved to fill the gap in flights to a number of holiday destinations. Meanwhile, Barrhead and others want to attract former Thomas Cook customers, especially with the all-important post-Christmas booking period coming up.
As people start to dream about their summer holidays, companies compete for attention with advertising across television and other media. And even with the UK in a somewhat precarious position, given the ongoing Brexit crisis, Chacko still believes in the market.
“We’re obviously long on travel, we’re long on travel advisors, (and) we’re long on the UK,” he said.
As well as Barrhead, Travel Leaders Group has also bought other UK-based businesses, including, meetings and events firm YES (Your Event Solutions) and Colletts Travel.
Bound Back Year?
Thomas Cook’s exit probably came too late to offer a significant boost to Barrhead’s 2019 financial year.
The company is a profitable one, but it has seen its earnings slide in recent times. Last year it suffered from the hot European weather between May and August, which “affected package holiday sales in the latest market industrywide,” its 2018 accounts noted.
Travel Leaders Group bought the business in 2018 from the Munro family.
Relations between the two parties, however, seem to have soured with founder Bill Munro, who setup the business in 1975, recently suing Barrhead Travel for unfair dismissal. A decision is expected before the end of the year.
The business continues to have a significant footprint in North America but has expanded across the Atlantic.
Chacko said the company has slowed down on the acquisition front over the last 12 months as it concentrated on doing some work on its back-end financial systems but would likely be on the lookout for new opportunities in 2020.
“We think there continue to be good opportunities in North America, also the UK, (and) frankly elsewhere in the world,” he said.
“HRG had a partner network all over the world…so we decided to go expand our international presence on the Travel Leaders Network late last year, and we targeted expanding to 90 countries. We’re at 90,” he said.
While the focus was on expanding the businesses corporate travel mix, it also helped on the leisure side too.
“So Travel Leaders Network has gone from being North America-centric to suddenly being global, all over Asia, Africa, South America, (and) obviously in Europe.”
Another area where the company might look to expand is further into the cruise industry.
“We have looked at some in the past and continue to be interested, and I think if the multiples are right, because we obviously want to buy one, those would be a very natural fit for us. Just given the size of our footprint in the cruise space,” Chacko said.
Photo credit: Barrhead Travel staff. the company was bought by Travel Leaders Group in 2018. Malcolm Cochrane / Barrhead Travel