After facing an unprecedented dip in online travel sales this spring, online holiday providers are finally recovering, thanks largely to unseasonably poor summer temperatures.
“We have definitely seen a resurgence in sales in the past couple of weeks due to the bad weather,” said Graham Donoghue, TUI’s new media director.
He reported that sales for late June, when Britain witnessed record low temperatures, flooding and hail storms, were up 100% year-on-year.
Andrew Botterill, head of high street agency consortium Global Travel Group, witnessed a similar trend. “If the next four weeks are anything like the previous two weeks, then we’ll be OK.”
Clive Peoples, head of customer communication at Expedia, agreed that unseasonably warm temperatures in April and May hurt travel sales, but that demand is recovering.
But the bigger online travel picture is not so sanguine. “Traffic on the web generally is down,” says Peoples. “We’re seeing a shift where European cities are not as in demand and we’re trying to work out whether it’s simply because European travellers are not travelling as much or if there are other factors at work.”
Donoghue concedes there has been a noticeable downshift in consumer demand recently. “The online market overall is down,” Donoghue said. Though TUI’s overall sales and traffic are up 38% year on year, the operator has witnessed a 10% fall in capacity.
Analysts observe that higher interest rates on mortgages, environmental concerns, and a general dip in consumer confidence could be conspiring against online travel sales.
There are some signs of recovery. TUI’s witnessing the most strength in its accommodation-only market, which saw a 200% year-on-year increase, while Gold Medal has seen a similar accommodation-only growth, and says flight-only sales are up 145%.
However, GTG’s Botterill notes that high street revenues overall are down. “There are encouraging signs, but there is definitely a trend away from online packages, [specifically] seven to 14-day package holidays.
“We are seeing a seismic shift and a complete re-positioning of strategy and infrastructure.”
Botterill, Donohue and Peoples were speaking at the latest Travolution advisory board roundtable. Full coverage to follow…