Working in market

DISTRIBUTION SYSTEM

Since March 2020,the UK travel industry has seen a shift in business operations as companies adapt to a changing travel booking environment. Several high-profile brands ceased trading in the UK including STA Travel and Austravel. Other brands have been consolidated, such as dnata’s Travel2 into Gold Medal. The downsizing of companies such as Flight Centre UK and the rise of homeworking companies such as Travel Counsellors, has changed the high street retail presence in the UK.

Online booking channels remain popular with savvy consumers, particularly for short haul and point to point travel. For more complex, long-haul destinations consumers are more likely to seek professional travel advice and place more emphasis on the retail sector who can provide package holiday protection. According to the Association of British Travel Agents (ABTA) Travel Trends Report 2022, people are 30% more likely to book with a travel professional now than before the pandemic, primarily for their guidance with Coronavirus travel requirements (47%) and the security of a package holiday (46%).

This is also evident for high value and luxury holidays to destinations such as Australia. Long haul specialists, such as Trailfinders, continue to play a key role in converting consumers and influencing them to spend more, travel more deeply and widely and stay longer. They also encourage customers to pre-book more ground components and boost the overall spend per passenger.

Tour Operators

Commission Level: up to 20%

There are more than 50 tour operators selling Australia throughout the UK, however a large proportion of sales to Australia are handled by a few key specialist long-haul Tour Operators.
Tour Operators vary from traditional wholesalers to companies that combine various wholesale, direct, online and retail channels.
Trailfinders, Audley Travel and Flight Centre are major retail, long-haul specialist tour operators for Australia. Other operators sending significant numbers of passengers to Australia include Travelbag, the Lotus Group and Travel Counsellors.
The key traditional wholesalers include Gold Medal (dnata) and If Only (for B2B luxury sales).

Retail Agents

Commission Level: up to 10%

Retail agents generally have a basic knowledge of Australia, largely due to the Commonwealth, sporting and historic ties that Australia shares with Britain and reasonable mainstream media coverage.
Hays Travel is the largest retail chain in the UK however, although considered an opportunity, they are not regarded as specialists in selling tailor made Australia holidays.

Aussie Specialists

Relaunched in August 2021, the Aussie Specialist Program (ASP) is the primary platform for Tourism Australia training and developing front line travel sellers to enthusiastically sell Australia. Each State and Territory has a module on the ASP website in addition to several others including the Signature Experiences of Australia, Youth, Self-Drive and most recently, Sustainability.
As at November 2021, there were 1332 qualified Aussie Specialist agents in the UK.

Online

Direct flights and accommodation bookings make up most sales through Online Travel Agencies (OTAs), a channel favoured by the VFR market, familiar with Australia.
Compared to the specialist Tour Operators, OTAs have a limited capability to transact complete itineraries for holidays in Australia. True dynamic packaging cannot be purchased online through any OTA.
The major UK online travel agencies are Expedia, Opodo, Kayak and Netflights (dnata).

Inbound Tour Operators

Commission Level: up to 30%

There are several inbound tour operators (ITOs) active in the UK market, these include: ATS Pacific, AOT Inbound, Pan Pacific, Southern World, Tour East and Pacific Destinations. In addition, The Tailor, Southern Crossings and Alquemie target the high-end sector.

Trends

Distribution

Australia is a key destination for specialist long-haul Tour Operators and Aussie Specialist Travel Agents due to the complexity and high value of the destination.
Distribution partners remain important in influencing consumers to spend more, disperse further, stay longer and pre-book more ground components.
To adapt to the changing distribution landscape, major retail agencies have invested in direct selling channels, such as call centres and online sites. For long haul travel, retail agents remain an important channel for consumers.
Vertical integration, consolidation and globalisation continue to be key trends in the retail travel sector. As a result, the number of UK retail high street outlets continues to decline. Bucking the trend, Trailfinders continues to open stores when they can acquire good high street real estate.
Independent home working is increasing in the UK, particularly through the likes of Travel Counsellors. Reports suggest although the high street may be in some decline, demand for travel agents is not.

Planning and purchasing travel

In terms of booking channels, research shows there remains a reliance on retail agents for long haul holidays as British consumers look for more protection. Offline travel agents remain the top method for those who would book a trip to Australia, with five in 10 nominating to book their trip with a high-street travel agency. Booking through an OTA was the second most popular booking method, closely followed by booking directly with an airline.
Australia has traditionally had long lead booking times due to the perceived complexity of the purchase in terms of time, cost and distance. With uncertainty around travelling during the global pandemic, fluctuating exchange rates and volatile pricing in the market, lead times for booking all international travel, including Australia, has become more unpredictable.

Special Interest

The youth travel market is readjusting after the loss of the STA Travel brand from the market. Current operators specialising in youth travel include Trailfinders, Student Universe, USIT/BUNAC, Kilroy and Gap360.
Key operators specialising in the luxury segment include Abercrombie & Kent, Elegant Resorts Original Travel, Carrier, Black Tomato and Turquoise Holidays, many are whom are members, along with Tourism Australia, of the luxury consortia, Serandipians by Traveller Made and Virtuoso.

Planning a visit to market

Top tips for sales calls

The best time of year for sales calls is March to June and October to November. Try to avoid the UK summer holiday period from mid-June to the end of August.
The key market centre to visit is London and the South East, with most specialist operators to Australia located in or around this region. Gold Medal Travel is located in Preston whilst operators focused on high-end holidays are based in the Chester and Cheltenham areas.
For more general information on sales calls and planning a visit to market, please see Tourism Australia’s 'Tourism Export Toolkit'.

Key Distribution Partners

Tourism Australia is a partnership marketing organisation and works closely with airlines and travel companies on cooperative marketing to drive conversion in all priority markets.

These targeted travel companies, including specialist long-haul tour operators, wholesalers, retail and online travel agencies, form Tourism Australia’s Key Distribution Partner (KDP) program with the intention to increase total booking value of visitors to Australia.

Each KDP is selected based on the fit with Tourism Australia’s market strategy, a shared target customer profile, shared funding of marketing activity, a commitment to training their frontline sales team through the Aussie Specialist Program and a commitment to selling quality Australian product and experiences.

Below are a selection of Key Distribution Partners that Tourism Australia is partnering with from the United Kingdom and Northern Europe.

WHERE TO FIND MORE INFORMATION

Tourism Australia’s activities in the UK and Northern Europe are managed from its London office. For more information visit Tourism Australia’s corporate website at www.tourism.australia.com.

Australian State and Territory Tourism Organisations operating in the UK include: Destination NSW, the South Australian Tourism Commission, Tourism and Events Queensland, Tourism NT, Visit Victoria and Tourism WA.

Also see:

An overview on the travel distribution system
A quick reference on key booking and travel periods for markets
UK Country Brief published by the Department of Foreign Affairs and Trade at: www.dfat.gov.au/geo
For additional statistical reports refer to the ABS and TRA websites, www.abs.gov.au and www.tra.gov.au

Working in Market - United Kingdom