Barrhead Travel to reveal jump in profits as Scots tire of 'staycations'

BARRHEAD Travel is expected to post a healthy rise in profits and turnover as the tourist industry continues its slow recovery from the wider global economic collapse.

Founder and chairman Bill Munro has also predicted further growth for Scotland's largest independent travel agency as consumers tentatively return to the market for overseas breaks.

Although more people are expected to holiday outside of the UK this year, there are indications in the industry that many will opt for shorter trips - seven or ten days - rather than the traditional summer fortnight.

"Spain is back with a vengeance," Munro said of Barrhead's most popular holiday destination. Economic woes in that country have led to price reductions of as much as 30 per cent, providing a lure for disillusioned "staycationers" who have attempted to save money by taking breaks within the UK.

"They have been drinking their expensive beer in Seton Sands in the rain, and they have had enough," Munro said.

Accounts due to be filed will show a 50 per cent increase in 2010 profits, up from the 2 million made by Barrhead during 2009. As predicted by the company, turnover breached the 100m mark - up from 81m the previous year.

Munro, who continues to hold a 25 per cent stake in the business, said Barrhead had benefited from savings in areas such as printing and utility costs.

The company, whose chain of shops will grow from 22 to 25 by this Easter, has also boosted the top line with last year's launch of foreign exchange services.

The internet now accounts for 45 per cent of Barrhead's business. The company's nascent cruise operation is also showing continued growth, even though overall UK demand for cruising has stalled.

Munro said the travel market's cautious recovery and Barrhead's expansion should continue to drive up turnover, which he believes could reach between 120m and 130m this year. However, it will not all be smooth sailing.

"The first two or three weeks were extremely good," he said of the traditionally busy month that begins in mid-January, "then it started to tail off. February has been more challenging for the whole industry."

Most holidaymakers will now hold off on booking until after Easter, which this year falls at the end of April. It will therefore be later than usual before travel firms get a fair gauge on demand.

However, there has already been a marked decline in long-haul travel that coincided with the eruption of political unrest in Egypt last month. Munro said it was not yet possible to tell whether the downturn in demand was linked to events in the Middle East, or was the result of last year's increase in air passenger duty, which put the biggest tax increases on those destinations furthest from the UK.

Barrhead employs a staff of 487 but is in the midst of a recruitment drive that will see this number rise to around 550. The company is headed by chief executive Sharon Munro, who bought out the majority stake in the business from her father in 2007.