Consumer gloom takes its toll on agents

TRAVEL CUTS:BUDGET TRAVEL has put a third of its staff on a three-day week, and there are indications that other travel companies are proposing pay cuts.

Spring holiday bookings have been slow throughout the industry, down between 30 and 40 per cent on last year.

The industry has responded by cutting overheads, particularly labour costs. “People are doing everything they can to avoid redundancies,” says Simon Nugent, chief executive of the Irish Travel Agents Association (ITAA).

He believes that about one in 10 travel agencies around the country has closed down in the past 12 months. Among the most recent casualties have been Home Abroad Travel, in Dublin, and Driftaway Travel, in Co Donegal. Last year the Mayo-based travel agency Great Escapes collapsed.

Next month will be particularly telling, as many agencies look to renew their annual bond, the insurance that protects consumers in the event of an agency’s going out of business, at the end of March. Each agency must lodge a percentage of its turnover in an account overseen by the Commission for Aviation Regulation.

Bonding was becoming contentious even before the recession, as airlines, which can offer everything from hotel bookings to car hire, are not required to hold bonds.

“It is not a level playing pitch for travel agents right now, and, given the current climate, there will be those who can’t raise it,” said one industry source, who advises consumers to be cautious about who they travel with.

ITAA research indicates that most people who took a foreign holiday last year intend to take another this year. “We are somewhat reassured by the findings,” says Nugent. “It means people aren’t viewing holidays the way they view changing the car, sales of which have fallen like a stone.”