OTA boss casts doubt on package revival claims

A leading online travel agent has cast doubt on claims that retailers focused on dynamic packaging are due a tough year.

Steve Endacott, chief executive of On Holiday Group, argues a first-quarter boom in package-holiday sales was to be expected but the trend from now on should be different.

In a comment for Travolution sister site Travel Weekly and on his blog, Endacott says the big tour operators enjoyed two advantages early this year which post-Easter they will lose.

He writes: “Differentiated product, which can only be bought from Tui Travel or Thomas Cook, sells well in the early booking period.”

In addition, he says, the major tour operators offer customers low deposits of £50 “compared to the £500 required for most dynamic packaging bookings”.

In the circumstances, he suggests: “It should not be surprising the rampant growth of dynamic packaging has slowed.”

But Endacott argues: “Differentiated product can quickly become a burden in the price-sensitive lates market … where full balances are required on booking [and] customers become more … willing to shop around.”

Industry analyst GfK recorded an 8% rise in package-holiday sales year on year in February, as Business:am reported yesterday.

And one of the first agency conferences of the year, that of the Hays Travel Independence Group, heard last month of a shift from dynamic packaging to package holidays “for the first time in years”.

Hays Travel managing director John Hays told members: “We are seeing a genuine trend. People are asking for packages much more in shops.”

Endacott agrees there has been a shift early in the year, saying: “It would appear the major tour operators slowed the growth of dynamic packaging in January to March.”

But he argues: “The majors should not be complacent because we have entered the late-booking market.”

Endacott forecasts low demand between now and Whitsun should drive down prices and play into the hands of dynamic packagers.