BARRHEAD Travel has shrugged off the challenges facing the global travel sector to hike turnover by 8.5 per cent to £267 million.
The Glasgow-based travel agent booked the £21m rise during what the independent described as a “difficult trading year”. It declined to say how profitable the business had been last year.
Holidaymakers are increasingly shunning destinations such as Turkey and North Africa amid concerns over terror attacks and political unrest.
Tour operator TUI highlighted the impact of those fears yesterday, citing a decline in bookings to North Africa and Turkey, where an attempted military coup was staged in July, as revenue dropped by 5.7 per cent in the third quarter. However TUI noted there had been no slowdown in bookings as a result of the Brexit vote in June’s EU referendum, as it reported a one per cent earnings rise to €180 million (£154.5m) in the period.
Fears over terrorist attacks have also affected Thomas Cook, with the travel firm forced to lower its full-year earnings guidance in July.
Barrhead made no direct comment on the terror threat in its statement yesterday, however it noted that it had seen an 18 per cent rise in passengers to the USA.
It also noted that Spain continues to be a popular destination with customers. Passenger numbers for Spain grew by 10 per cent in 2015, while passengers to Turkey are down significantly, fuelling the impression that holidaymakers are favouring destinations further west. “As we do every year, we witness shifts in destination choices due to shifts in trends, demands and climate,” said chief executive Sharon Munro. “This year, customers have been flocking to Spain, [the] Balearics and [the] Canaries. Tenerife is up 25 per cent year on year. Although Turkey is seeing a decrease in passenger numbers year on year at the moment (down 46 per cent) we still have an interest in it as a destination.”
Ms Munro told The Herald in May that she was urging customers to book quickly for package deals to Mediterranean destinations such as Portugal and Spain to avoid disappointment as demand for holidays in countries like Turkey and Tunisia tailed off.
Her comments followed reports from travel agents of “notable increases” in reservations for Spain, Portugal and Cyprus in light of attacks by Islamic militants in tourist hotspots.
Commenting on its 2015 results, Barrhead cited the positive effect of investment in technology on business growth. It underlined the impact of recently opened stores reaching maturity, improvements to websites and the growth of long haul and cruise sales.
Cruise turnover increased by 20 per cent to £70m last year, while foreign exchange sales rise by 31 per cent compared with 2014.
Barrhead noted that 2015 had seen its first flagship store in England, adding the outlet in Newcastle’s Eldon Square will be followed by two further openings this year. After that the company, which employs more than 800 of its 900-plus staff in Scotland, plans to open as many as five stores each year in subsequent years. The company said it will launch a “high tech” training academy in Glasgow city centre in September.
Ms Munro said: “I am delighted with our results especially in what was a difficult trading year. The travel industry is a high volume, low margin business as shown by our average profit being only £10 per passenger. We have exciting plans for the rest of the year with the introduction of virtual reality headsets into our stores which will allow our customers to view hotel public areas and bedrooms along with destination experiences before they book. We are also about to launch a new online customer portal providing customers with a secure online space which allows the Barrhead team to deliver a very personalised and unique service from start to finish.”
Barrhead said the personal boycott of the travel agent by SNP MSP John Mason over its opposition to Scottish independence is having “no effect on trading or repeat custom”.
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