Editor’s note: This article was first published in June 2011. The figures are from that month: 3,000 agencies already closed in Spain, more than 1,500 still expected to close, and 13,000 agencies in Spain versus 8,000 in Germany in 2008.
Antonio Távora, president of the Business Association of Travel Agencies (Asociación Empresarial de las Agencias de Viaje), is optimistic about the sector’s recovery, although he also points out that, to bring supply in line with demand, more than 1,500 travel agencies would still have to close in Spain, on top of the 3,000 that have already shut their doors.
The situation of travel agencies was unsustainable. According to Távora, in 2008 Spain, a country of 40 million people, had a total of 13,000 travel agencies, while Germany, a country of 80 million, had only 8,000 businesses of this kind, even though German households are financially healthier than Spanish ones.
The hardest hit have been franchised travel agencies that opened without doing any market research. When we talk about franchising, we always say that you’re buying into a proven business model. In this case, though, the model may have been proven, but the location wasn’t. It was a huge mistake by many franchisors, who led their franchisees into a business that has not been profitable and was not prepared to weather a crisis.
Távora also warns us to be careful with irresistible deals. Even though our country is in crisis, prices don’t depend solely on Spanish companies, because the tourist destinations where holidaymakers go have not lowered their accommodation prices. He explains that behind some “super deals” there is simply a price that was raised beforehand and then cut back to its real level. There can’t be huge differences between the same holiday package sold by two different agencies.
Even so, while the traditional agency business is in decline, entrepreneurs who brought other business ideas to the sector, focusing on specific groups of customers, have seen greater demand and have therefore built more profitable businesses.
We’re talking about travel agencies for gay and lesbian travellers, such as Turismo Multicolor, or agencies that have focused on other kinds of tourism business, such as wine tourism, adventure tourism or business tourism.
Further reading
- Business ideas in leisure and tourism
- How to increase sales in a business during a crisis
- 5 ways to grow your business
Featured image: U. A. Saarinen, CC BY 4.0, via Wikimedia Commons.
