Holiday discounts to restrict future investment

Savage discounting threatens a long-term fall in investment in product as well as the future of some companies.

Flight Centre UK managing director Chris Galanty told the Barclays Travel Forum: “I never thought to see prices of £360 to New Zealand. Customers are getting used to paying less than £500 to fly to Australia and that is not good for anyone. The investment will not be there to improve product.”

Travel Counsellors managing director Steve Byrne said: “It is very tempting to discount, but it is really dangerous. We should fight it at all costs.

“You can get distracted by recession and fighting short-term battles when what matters is how you look after your customers. I would rather sacrifice market share to get a better margin.”

Stella Travel Services UK managing director Andrew Botterill added: “Margins are under real pressure. We are selling high volumes, but it is not particularly profitable.”

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