Holidaybreak has cut £2 million in costs from its Superbreak Mini-Holidays and Explore tour operations as it reports group trading to be flat year on year to date.
Its interim management statement for the period from October 1, 2008, to February 17, 2009, revealed overall group sales to be 0.5% up at current exchange rates, with sales propped up by stronger sales in its European markets and robust education travel sales.
The group anticipates trading to be in line with management expectations for the full year ending September 30, 2009. but has 41% of stock still left to sell compared to only 37% this time last year.
Tough trading conditions have led to cost cuts of £1 million in its hotel division and £1 million in its adventure travel division – mostly achieved through job cuts.
Around 20% of operator Superbreak’s workforce has been axed. Most of these jobs, part of around 150 redundancies announced in November (Travel Weekly, December 2, 2008) were from its call centre, while further savings have come from merging of IT departments.
Group chief executive Carl Michel said: “We have now reached a sensible level but we would still look to trim numbers by natural attrition and not filling vacancies.”
The group’s hotel sales are currently 10% down year on year – compared to 15% down in November last year – and in recent weeks have improved to 6%-8% down as a result of new theatre shows such as Oliver! boosting bookings in the capital. Hotels account for 33% of the group’s revenues.
Cuts at adventure tour operator Explore have resulted in around 20 redundancies, while marketing spend has been paired back and adventure travel division managing director Simon Tobin is to step down at the end of this month. Michel will become non-executive director of this division, with individual managing directors in the division to report directly into him.
Bookings in the adventure travel division have been hit by the exchange rate of the pound with the euro and the US dollar and a later booking trend, which is also affecting camping sales.
Adventure travel accounts for 21% of group revenues, with sales up 1% on lower volumes. Currently 61% of sales for this year are already booked, compared with 72% last year at this time.
Sales for the group’s camping division, which include Keycamp Holidays and Eurocamp, are 5% down on last year with 62% of holidays booked compared to 67% last year. Camping makes up 22% of group revenues, and capcity has been cut by 4% for 2009, mostly through reductions in the number of tents offered.
Michel said poor sales in Ireland, historically 7% of business, were being hit by a difficult economic environment, while the company’s own research shows 55% of customers plan to book camping holidays later this year.
Michel added: “Some people are trying camping for the first time [as a result of the economic downturn] but others are trading out, and presumably not going on holiday at all. We are waiting to see how this develops.”
Camping yields are being held up by Dutch and German bookings, he said, and unsold UK stock can be shifted to these markets.
Michel warned UK holidaymakers waiting for a last-minute bargin could be in for a shock. “They are waiting and assuming prices will drop. There may be isolated cases but there is less supply and the range of bargins will not necessarily be there if they leave it late.”
Meanwhile, the group’s education travel sales are 13% up, with 85% booked for 2009 and 14% for 2010. Education makes up 24% of group revenues.
Michel said: “At the moment, parents are viewing these trips as sacrosanct.”
* Holidaybreak makes 150 redundancies in four months (Travel Weekly)