Hays Travel faced just such a problem when the Budget saddled the agency with a 10% increase in its wage bill thanks to increases in the National Living Wage coming next April and other costs.

However, speaking to TTG at the agency’s annual conference in Turkey, owner and chair Dame Irene Hays proudly insisted staff wouldn’t be hit in the pocket and would continue to receive more than living wage despite the Budget setback.

She was adamant, too, that the bill wouldn’t be passed on to suppliers, despite Hays shouldering the cost of operating a national retail network of around 500 shops – one that offers them vast distribution opportunities.

“We value our supplier partners and believe they too will be challenged so we will be looking at every opportunity to make sure we generate more revenue next year,” said Dame Irene.

This means identifying new growth areas, many of which will be driven by renewed focuses on both the long-haul and cruise markets.

Chief operating officer Jonathon Woodall-Johnston revealed the agency was targeting 350,000 long-haul passengers by its 2027 financial year, which he said would provide an immediate cash boost with the market offering around three times the profits available from short-haul.

Efforts to achieve this include bringing over content from the currently separate Hays Faraway website to the main Hays website and a 12-month marketing strategy, which is already in place. New routes to market, increased staff education and deeper supplier relationships are in the pipeline.

Hays head office is also taking advice from the team at Miles Morgan Travel, which Hays acquired in May and has a successful track record in the long-haul sector.

Dame Irene said while the move should benefit Hays’ bottom line, it also came in response to changing market conditions. “The research clearly shows there is a transition from short- haul, value holidays to mid-market and higher- value breaks, and we have watched that evolve.

“There are also some fantastic places in long-haul destinations that are trying to attract more tourists, while in some European places they are trying to cap numbers of tourists.”

She added some long-haul travel was beginning to compare favourably on value grounds with certain short-haul destinations that are seeking to drive up the quality of their product to attract a more affluent class of tourist.

’Cruise is another door that is wide open’

Hays’ cruise division is also pursuing growth, with 400,000 annual passengers targeted for the 2027 financial year. Woodall-Johnston said the market was buoyant due to more regional airlift and extra capacity going into the Mediterranean, which is creating opportunities for agents.

“Fly-cruise is much more difficult to transact online, with less than 5% of all fly-cruise in the UK being transacted online,” he said. “We’re also able to tailor-make with cruise and stay, which demonstrates the value of our people.”

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Woodall-Johnston highlighted the Caribbean as a strength for Hays. “We have 11 exclusive departures where we charter the aircraft, with eight regional departures,” he continued. “The challenge we have there [the Caribbean] is they sell so quickly we don’t have enough capacity – we’re already fully sold out for the next 18 months.”

He revealed the agency is currently selling cruises as far ahead as 2027, adding Hays’ decision to make direct debit payments available for all holidays – bar last-minute departures – was making them more affordable.

Dame Irene said Hays was continuing to successfully tap the new-to-cruise market thanks to the support and expertise it offers customers, and also praised cruise operators for driving growth.

“Cruise is another door that is wide open,” she said. “We know about the appetite [among consumers] – if you marry that with the hardware coming into the cruise market and the amount of money the cruise lines spend on marketing, all of these things together have informed our strategy.

"Arguably, we should have done it years ago, but we’re doing it now and we think it’s the right time.”

Other efforts to boost profitability include a renewed focus on forex and more Sunday trading – a further 110 Hays shops, on top of the current 167, will be open on Sundays in time for peaks.

Given the expertise and business acumen that has been synonymous with Hays Travel since its launch in 1980, it comes as no surprise to see the agency finding its own positive solutions to the challenges of the day.