Why the UK heatwave and Xbox is to blame for 20% sales slump

Major OTAs have seen sales slump 20% in the UK as the country basks in glorious summer sunshine, according to a leading trade supplier.

On Holiday Group chief executive Steve Endacott claimed on his blog that the decline in sales last was so severe that it rivaled the 25% drop due to the 2010 Icelandic ash cloud.

This prompted UK airspace to be closed for more than a week – the current hot spell during which temperatures have soared above 30 degrees centigrade has persisted for about as long.

Endacott said the impact had been felt most acutely in the commoditised, dynamic packaging end of the market where customers are more price-sensitive.

He believes customers with money and jobs who have been immune from the worst of the economic downturn have traded up to the differentiated product on offer by the traditional tour operators.

However, even they appear to be suffering, the share prices of both Tui Travel and Thomas Cook having dipped amid concern that late demand will be hit.

Endacott also claimed that the impact will be made worse by the electronic revolution given that school children these days are far happier to stay at home during the school holidays streaming video and playing on games consoles.

“If we cannot provide the connectivity our kids demand in life, don’t be surprised if they start refusing to go on holiday with their parents to destinations that only offer a beach and a pool,” he said.

“It may have been good enough for us as kids, but it’s clearly no longer good enough for this generation.

“So when the kids are happy at home and the parents can get a free tan in the back garden, I suppose a 20% drop in relatively expensive school holiday sales should not actually be as big a shock as it felt this week.”

Endacott’s view of the market echoes what others have been saying about a less busy than expected start to the lates selling period.

Monarch Travel Group managing director Hugh Morgan noted that last month’s pay day had not prompted a spike in business.

Speaking at the start of July, he said: “We have had a very good year to date; business is doing extremely well and we have been outperforming the market for a long time now.

“But the last couple of weeks it’s been noticeable people have not been that exuberant. Generally speaking packages are still doing extremely well, it’s the seat-only market that has slowed a little.

“Whether Ryanair has got a lot of capacity to shift or easyJet I don’t know, there just seems to be a battle going on.

“It will be a very, very late lates but you have to remember the first 15 to 20 days of July are always a bit slack.”

Morgan also said it was noticeable that more people were making their holiday purchases by debit card as opposed to credit cards meaning they needed to have the cash in the bank.

This website uses cookies to ensure you get the best experience. Learn more