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Ireland’s largest tour operator, Budget Travel, has confirmed that it has commenced a 30 day consultation process with staff to discuss plans for a ”very significant” restructuring of the business in the coming months. It is planning to close up to 14 of the company’s 31 retail stores and cut 95 jobs. The decision has simply been made and will be put into effect. Irish tour operator business is down 40%.
Speaking this afternoon, chief executive Eugene Corcoran said that the key to continued success for Budget Travel would be reducing the business’s cost base and maximising its flexibility to respond to increases or decreases in consumer demand; “we need to restructure the business for current and future market conditions in the context of a market where demand for holiday packages will be significantly more volatile from year to year than it has been in recent years.”
Corcoran said that a key part of the restructuring would be to drive increased bookings through the internet; “We’re going to increase our investment in our internet offering because customers are demonstrating a clear preference for internet bookings and we’re got to reshape our retail business to reflect that.” He indicated that the company was planning to close up to 14 of the company’s 31 retail stores and reduce the headcount in the retail side of the business by approximately 75 with an additional 20 or so redundancies in the company’s head office. Budget current employs 266 people.
Corcoran said that demand had fallen substantially across the Irish travel business this year; “We estimate that overall demand amongst Irish tour operators is approximately 40% down on last year and our experience reflects that. The key to the future is to have a business model that has maximum flexibility to respond to volatile demand while remaining profitable.”
Founder Gillian Bowler came to Ireland to start a travel operation from a basement office in Dublin in 1975. She started off specialising in holidays to Greece and by the end of her first year of trading; Budget Travel had sold 200 seats.
By 1983, the market for sunshine holidays had rapidly expanded, with over 200,000 Irish people travelling annually. Budget Travel's market share enjoyed continued growth through a determined strategy of “better places, better prices”.
In 1987, Granada plc bought Budget Travel and this provided the company with necessary backing to further develop and ultimately expand the destination range to become Ireland’s No 1 Tour Operator.
Thomson Holidays acquired Budget Travel from Granada PLC in 1996. Thomson Holidays were taken over by the World of TUI in October 2000 and in 2007, Budget's parent company, TUI Travel Plc, merged with First Choice UK. The terms of this merger required TUI to sell all of its interests in Budget Travel and, in September 2007, Primera Travel Group became the new owners of the company.
2008 saw almost 350,000 Irish holidaymakers travelling with Budget Travel to a range of popular destinations and a 35% total share of the market.
Budget Travel's retail division, Budget Travelshop was launched in 1995 and has rapidly expanded to become Ireland's leading travel chain, with a network of 31 high-street shops nationwide.
