MyTravel on Tuesday sounded the death knell for UK high street travel agents when it said it would close 110 of its Going Places travel agent outlets because of the “continuing growth of internet sales”.
High street travel agents have suffered from the booming popularity of internet travel bookings, with many tour operators closing shops on the high street.
MyTravel, formerly known as Airtours, said it had brought forward a planned “realignment” of its distribution channels. The closures will leave it with about 500 shops. “It has always been our intention to reduce the shops down to about 500 by 2007,” said Peter McHugh, chief executive. “With the internet producing the volumes for us that it has we decided to accelerate that process.”
Bookings on the internet increased to 16 per cent of total sales in October, compared with 9 per cent in October 2004. The company expects to generate annual savings of £10m following the shop closures, and said all employees affected would be offered alternative roles.
MyTravel said full-year trading was in line with expectations. Bookings in the UK and northern Europe for the winter season had started slowly and were behind last year by 10 per cent, although the group said this was because of the trend toward later bookings.
Mr McHugh said trading had been “encouraging” in recent weeks. “Things have picked up very nicely,” he said. He added the company was more concerned with managing capacity and producing profits than increasing the volume of bookings. “We’re really not chasing volume. We’re chasing margin.”
The group said trading for the summer of 2005 had been at record levels and was ahead of expectations.
However, profits are likely to be affected by Hurricane Wilma, which recently hit Mexico. The group had more than 3,000 customers from the UK and 729 from Canada in the hurricane area. The disruption cost MyTravel £4m in repatriation flights and cancellations.
Package holiday bookings for the winter season were down 6 per cent on last year and down 1 per cent for summer 2006.
Although MyTravel’s rivals, such as First Choice, have diversified into more specialist holidays, Mr McHugh said that the package holiday had a bright future.
MyTravel shares rose 3¼p to 181p.
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