Travel companies should target older customers as consumer spending comes under even more pressure this year.
Experts at the Travolution Summit agreed that consumers will continue to cut back on discretionary spending during 2010.
Speaking at the opening session – Economic and Political Update – Rt Hon Michael Portillo said many consumers did not feel the effects of the downturn last year.
“By the end of 2010 we’re going to see tax rises in a new budget and the beginning of public sector spending cuts. People will be nervous about spending.”
More mature customers are now an important market for travel, said HSBC chief economist Dennis Turner. “There is a large number of older consumers not weighed down by debt, this is a huge marketplace for the travel sector.
“At other end of the age range it will be difficult. It is difficult to see how the pressure on them will ease substantially.”
Nielsen European business insight director Jonathan Banks said the economy would be a primary concern for consumers this year, as financial worries overtake social concerns.
Nielsen statistics showed 28% of people will cut down on holidays/short breaks and 16% will cut out their annual vacation.
Banks warned that consumers had developed new behaviours which would last after the recession.
He said: “Consumers have realised they don’t need 4 luxury holidays a year – two or three will do.”
Speaking about the economy, Turner said the UK was stumbling its way out of recession, but there are still risks to recovery.
“Recovery will be very slow and the risks are on the down side. The economy could slow again this month compared to December but that doesn’t mean a double dip – it just means the economy isn’t doing what it should.”
On a positive note, Turner predicted an improvement in the strength of the pound. He said: “The euro is over valued – I’d expect the pound to strengthen against the euro over next 18 months.”