PricewaterhouseCoopers’ latest research is broadly good news for travel companies. Only 16% of consumers it surveyed will give up a holiday altogether compared to 20% six months ago, and only 17% will take fewer holidays, compared to 21% only six months ago. So despite the fact the UK is now in a full-blown recession, consumers…
Cheap prices not enough if the job goes anyway
PricewaterhouseCoopers’ latest research is broadly good news for travel companies.
Only 16% of consumers it surveyed will give up a holiday altogether compared to 20% six months ago, and only 17% will take fewer holidays, compared to 21% only six months ago.
So despite the fact the UK is now in a full-blown recession, consumers are in fact more confident about taking a holiday than they were just last July.
What that tells us is holidays are something very few of us are now willing to forgo – nothing new there.
But what is important to note for companies in the current marketplace is that consumer confidence to take a holiday is linked so closely to the jobs market.
To put it bluntly, the success of your company could depend to a large degree on how many of your customers still have a job. If they do, they will still travel. If they don’t, they may be among the 16% ditching their annual holiday.
Clearly, the impact of the current recession and the number of jobs lost in its path will have a direct impact on the number of holidaymakers booking holidays.
So, who else is in the firing line? PWC’s head of travel Malcolm Preston warns the short break sector is the most vulnerable, with evidence suggesting consumers are dropping second holidays.
Preston doesn’t mince his words – travel agents and tour operators alike that specialise in this area are in trouble if statistics are to be believed.
PWC’s figures also hold some more bad news – people will trade down and book later. A quarter of consumers it polled say they will spend less to go to the same location by using cost-cutting tactics such as shorter holidays, waiting for a last-minute deal or sourcing cheaper accommodation or flights.
Companies who can hold their prices will win the day, but in a market with a history of price wars this could prove one of the hardest trading environments yet for many tour operators. “It’s almost like playing poker with your customers – who’s going to blink first?” says Preston.
The holidays currently selling out the quickest are, of course, the tactical price-led deals.
And where are they? Online, of course.
But where are customers still turning to get advice and confidence? Their local travel agent.
Now there’s a paradox.
More information:
* Consumers now even less likely to give up holidays, says PWC (Travel Weekly, Mar 09)
