Impact of no deal Brexit alarm and delay ‘disaster’ discussed at Travelzoo breakfast

A downturn in bookings for this summer was linked directly to a front page article in The Sunday Times in December warning people not to go on holiday after March 29. The piece, based on an unsourced leak, claimed that the government was due to have discussions about the impact on the travel sector in … Continue reading Impact of no deal Brexit alarm and delay ‘disaster’ discussed at Travelzoo breakfast

A downturn in bookings for this summer was linked directly to a front page article in The Sunday Times in December warning people not to go on holiday after March 29.

The piece, based on an unsourced leak, claimed that the government was due to have discussions about the impact on the travel sector in the event of a no-deal Brexit at the end of this month.

A Travelzoo business breakfast this week heard from Martin Alcock, director of Travel Trade Consultancy, who quoted GFK data analysis of 16 million mainstream holiday bookings in the UK.

He said up to that article being published summer bookings for 2019 were tracking between 5% and 10% up. Since the week-on-week figures have dropped into negative territory and not yet recovered.

Despite that Alcock said consumers are booking with the current winter season up 3% although prices are flat, and summer up 1.5% with 48% of volume already sold.

“It’s not a disaster,” he said, “there is definitely a feeling that pricing-wise and margin-wise it’s a little tougher, but it has not totally fallen off a cliff.”

However, agents and operators at the breakfast said that people had been holding off bookings, particularly for departures around the Brexit deadline of March 29.

Significant discounting in order to stimulate the market has failed to boost bookings with savvy consumers anticipating even better offers in the lates market, travel firms at the breakfast said.

Alcock cited Barclaycard data which shows spending on travel was 13% up month-on-month for most of last year, partly as a result of the banning of fees on credit cards.

However, in January travel spending was down 3%, according to the Barclaycard data. “You could probably put a large portion of the blame on the Sunday Times article of December 16,” Alcock said.

“It was a pretty stark warning. Families were advised not to book. It was a baseless leaked report from a government department suggesting holiday companies would be dropping like flies.”

Alcock said after the article was published the market also started to see a “chasm” opening up between EU and non-EU departures, with the former “never really recovering”.

Despite the uncertainty linked to the political impasse over Brexit, Alcock remained positive about the market. “I firmly believe there are lots of people out there ready to spend money.”

He said consumers are being kept back from booking holidays due to the ongoing lack of a resolution as a succession of apparently key Brexit votes over Brexit are held in Parliament , he added.

“If you had told people back in January that by March 20 we would be no further ahead people would have booked but everyone is saying, I’m just going to wait.”

Alcock added that a short delay would be a “disaster” for the travel sector whereas a longer delay of 10 months would “save the summer season”.

“Even a no deal would be not that bad for bookings because at least people would have certainty. There’s a feeling now of “let’s just get on with it”?

“A two month delay is nothing more than kicking the can down the road and kills the summer season. It’s the worst case scenario.”