There is no avoiding the fact the travel industry is having to work harder than ever to earn its crust. But new official industry statistics, produced by Ascent MI’s Leisure Travel Monitor, provide one of the first pieces of concrete evidence of the extent of the damage on 2009 sales. Holiday bookings up to the end…
Preparing for the ultimate test
There is no avoiding the fact the travel industry is having to work harder than ever to earn its crust.
But new official industry statistics, produced by Ascent MI’s Leisure Travel Monitor, provide one of the first pieces of concrete evidence of the extent of the damage on 2009 sales.
Holiday bookings up to the end of last year for summer 2009 were down by more than 10% across high-street, phone and internet bookings. The latest figures suggest business is bad – but perhaps not quite as bad as many feared.
However, since January and the start of the peak booking period, the UK has officially moved into recession and consumer confidence has fallen to an even lower ebb.
It is hard to gauge what this will mean for bookings up to March, when the trade traditionally racks up a third of its summer bookings, but the outlook can’t be pretty.
Nevertheless, there is some cautious but positive cheer in the latest figures – the decline in bookings has not resulted in a corresponding drop in revenue for high-street travel agents.
In fact, the LTM reports, revenue through the high-street only fell by 1% up to the end of December for this summer despite a double-digit decline in sales.
In other words, high-street travel agents’ revenues have been to a large extent protected from the current recession. There could be several reasons for this.
While prices are higher as a result of capacity cuts by major operators and the impact of the poor euro exchange rate, there is a substantial and well-documented trend for all-inclusive holidays.
The LTM’s own statistics bear out just how much all-inclusive sales, which tend to have a higher price tag, are propping up revenues. One in four holidays sold were for all-inclusive breaks for weekly bookings up to and including January 24.
Another factor in the mix is that many holidaymakers outside of the family market are not spending less on holidays. The talk on the high-street is that customers would rather spend their savings on a well-earned break from the doom and gloom than leave cash in the bank.
With interest rates down to 1%, this attitude is hardly surprising, particularly for the older market and those with a higher disposable income. Further good news is that LTM’s figures for weekly bookings up to and including January 24 actually show a growth in holidays priced £1,000 to £1,599.
It is certainly true holidays are one of the few outgoings consumers will not sacrifice. In a recent poll of the most saved for items by 3,000 customers of The Co-operative Bank’s online bank smile in December, holidays came top with 57% of respondents saying they saved for a break each year.
According to the same survey, the average amount consumers saved last year varied from £1,315 in Wales to £2,483 in London and are forecast to increase by 35% this year. The trade may not be jumping for joy, but this will no doubt come as welcome news.
Sadly, there will only ever be a portion of the market content to book all-inclusives and the boom in this sector will not eradicate the current bookings crisis in the family market.
Agents would be wise to be prepared for when the all-inclusive bubble bursts, too. Last summer, according to the LTM, high-street agents hung on to their incomes thanks to increased all-inclusive sales but lost face-to-face sales to internet and phone booking channels.
When this income stream diminishes, traditional travel agents need to be ready to fill it to maintain over the counter sales.
In the meantime, only trading figures over the next few weeks and months will prove how bad this summer will be. It could yet prove the ultimate test.
More information:
* Holidays still dominant choice for families (Travel Weekly, Feb 09)
* Holiday sales mi-haul increased by 3% this winter (Travel Weekly, Feb 09)
* High streets agents’ incomes held up by all-inclusive sales (Travel Weekly, Feb 09)
