Clouds have been gathering over the Scottish and UK economies amid tightening consumer spend, rising inflation and Brexit fears. But Sharon Munro forecasts sunnier skies for Barrhead Travel, which books about 320,000 people on holidays a year, and where she is chief executive.
“We’re very fortunate that in travel it’s one of the very last things that someone would give up when things are a bit tight,” she says.
Backing this up, the company last month revealed that gross turnover rose by £12.7 million to £279.2m in 2016. Forward bookings in current trading showed an 8 per cent year-on-year increase, and the company said it expected 2017 to “return a further improved performance”.
Such buoyancy was echoed by ABTA, the UK’s largest travel association, in its Holiday Habits Report 2017. It found that Britons have taken more holidays on average per person than at any time since 2011, and are set to spend more on their trips in 2018.
Munro says fears that the internet would sound the death knell for the travel agent are unfounded.
“People still want advice and service, and to know that they’re booking with a brand that they can trust,” she says. “If something goes wrong they can come in to the store and speak to someone about it rather than some of these other ‘faceless’ organisations.”
Barrhead, based in the East Renfrewshire town of the same name, saw pre-tax profits fall slightly in 2016 to £2.8m, down £300,000 on 2015, with the drop reflecting a £500,000 investment in setting up a Newcastle store and a further £350,000 ploughed into customer-facing technology.
Barrhead has 70 outlets across the UK, having expanded in England, opening in Leicester earlier this year to add to the Newcastle site, and is set to open its 71st branch in Belfast next month. The company combines traditional bricks-and-mortar sites with technology, including virtual reality headsets and artificial intelligence. And despite encroaching automation, Munro is convinced that the human touch will retain a pivotal role. “Although [Barrhead is] quite advanced in technology and we’ll continue to look at ways it can help us develop and grow our business, at the end of the day it comes down to people. I never think in our industry that technology will take over from people.”
She adds that most of the firm’s customers are in the 45-plus age bracket, an affluent demographic, with Barrhead also focusing on upgrading its online offering as the younger, more digitally- minded generation comes through.
But branches remain key, with plans to move some to larger locations due to customer demand, and open in new sites altogether.
“We’ve actually already identified and are in negotiations with a further five places across the UK for next year,” she adds, eyeing sites beyond Scotland.
“However, all these bookings and all the support services will be managed in Scotland through our head office.”
And she says the firm still sees great opportunity in the UK, but is also mulling overseas expansion.
“We would consider taking our model to other countries where we think it would do well – we’ve actually got a couple of places in mind,” she explains, declining to specify where. “But we’re going to target the rest of the UK first.”
Barrhead now has more than 1,000 staff and is recruiting “heavily”, according to Munro, who is looking to add a further 85 by the end of this year.
The company was established in 1975 by Munro’s father Bill, now chairman, and she grew up around the business, earning her pocket money with tasks including delivering leaflets.
This translated into a Saturday job before joining as a trainee on leaving school, and she ascended through the ranks. “Back then you did everything. Eventually, as the business grew, we started to set up other divisions, so I got involved in that. I was in the marketing department, I was in credit control, I’ve worked in finance, so I’ve got a really good understanding of the business and how it works.”
But she also says that being the founder’s daughter initially brought greater rather than fewer pressures. “One of the things I’ve had to do is work quite hard to prove myself, not just to my colleagues that I’m worthy of what I’m doing, but also to my father.”
To get where she is today, “it’s been through merit rather than the fact that it was my father’s business,” she adds.
In 2007 she led a management buyout from Munro senior with three other female managers in a succession plan that saw ownership of the group remain with the family. That year the firm had eight high street shops and a turnover of £68m.
It now operates its own summer charter flight programme from three UK airports, transporting more than 22,000 passengers a year, and has been acquisitive, in 2012 snapping up The Holiday Specialists in a deal worth around £3m.
The latter firm’s main business was direct online cruise sales, with Munro seeing the popularity of this type of holiday racing ahead at a rate of knots as holidaymakers seek out multi-destination trips. Cruise Lines International Association said in a study of the UK & Ireland market that passengers could hit another record level this year to reach two million.
And Barrhead may be targeting further deals. “Going forward we would absolutely look at any opportunity that’s out there, and one of the things that we have been considering to help with the growth of the business is to look at acquisitions, whether that be a travel agency business or whether that be a small tour operation business that specialises in a particular product or destination.”
Barrhead has developed specialist divisions such as Brilliant Travel as it seeks to gain traction by matching customer and holiday as closely as possible, with Munro previously pointing out that the firm’s average profit per passenger was only £10.
Amid such tight margins, industry pressures saw the collapse of low-cost carrier Monarch Airlines this year. Munro describes it as “very unfortunate”, adding: “There’s a place for everybody. There’s a place for low-cost carriers, there’s a place for tour operators, and there’s certainly a place for a business like ourselves.”
One reason cited for Monarch’s failure was increased global terrorism, and Munro admits it is a challenge, stating: “We just need to be prepared as much as we can and be there to work through any situations that might arise.”
Brexit poses potential turbulence, in aviation in particular, but Munro remains positive. People will continue to travel, she believes. “Tourism is such a major part of a number of different countries’ economies, so I’m sure solutions will be found.”
Globally, travel and tourism supports 292 million jobs and generates about 10 per cent of GDP, according to the World Travel & Tourism Council.
It’s a trade that Munro is evidently passionate about. “It’s a really exciting environment to be in… you’re selling dreams.”
Looking at Barrhead’s horizons, she is optimistic that it can reach new heights. “We’re just constantly looking at where the opportunities are. As a business you can’t stand still – because you go backwards.
“It’s not like we want to be the biggest either – that’s not our ambition. We just want to be the best. We love what we’re doing and just want to do more of it and do it better.”