30 June 2008

Summer holidays sales surge prompted by Ã¢â¬Ëœsod itÃ¢â¬â¢ factor

Summer holiday sales are surging as people say Ã¢â¬Ëœsod itÃ¢â¬â¢ to the credit crunch, according to a leading travel agency group.

Global Travel Group reports a 10% increase in sales and a 15% rise in the average selling price of holidays for this summer, compared with the same period last year.

People are buying more holidays and paying more for their trips Ã¢â¬' particularly for luxury breaks - despite a slowdown in the economy and a rise in household bills and mortgage rates.

Dave Clayton, commercial director for the group, which has 700 high street members, said: Ã¢â¬ÅâœHolidaymakers are having to accept that their bills will rise but, as research shows, the one thing they are not prepared to go without is a holiday.

Ã¢â¬ÅâœPeople are saying Ã¢â¬Ëœsod itÃ¢â¬â¢, IÃ¢â¬â¢m going away. At the other end of the scale, the people who are buying luxury trips are not really affected by the credit crunch.Ã¢â¬~

But he agreed with other industry commentators who have warned there are tougher times ahead.

Ã¢â¬ÅâœNext year, more capacity will be taken out of the market, which will naturally push up prices and affect demand,Ã¢â¬~ he said. Ã¢â¬ÅâœAlso, tour operators will put up their prices because of the rising cost of fuel and people will have less money in their pockets.

Ã¢â¬ÅâœItÃ¢â¬â¢s a boom time at the moment but we have to plan for more challenging times ahead because it would be careless to think this will continue in the longer term.Ã¢â¬~

by Phil Davies

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Your Comments (2)

Agree but watch out for 2009 !

I agree with the comments in this article, sales and revenue are holding up better than many expected. The last time we faced really testing times was in 1992 and the difference between 1992 and today is that in real terms clients still have more money, holidays have not risen in line with inflation, and job insecurity is (so far) not as bad as it was then. Additionally people have more things they can give up now - that weekend break in Barcelona, that new wide screen TV etc - whilst still retaining the funds and will power to go on holiday. Do not forget the one off factors of the merging of the big 4 to the big 2 and the effect that has had on tightening capacity in 2008 - and this cannot happen again in 2009. It could be that the holidays booked this year are one last surge before belts are tightened up for 2009. There are other worrying factors such as the exchange rate to consider. Most operators bought currency forward in 2008, and these rates are not going to be repeated for 2009. Everyone's capacity should be controlled more than ever in 2009 to retain profitability.

By Nick Cooper, Monday, June 30, 2008
Dream world

According to the latest polls this is clearly just a case of a PR company using positive thinking to try to get people to book. Thank you, but as only one in ten of my friends can actually afford to take a holiday as a direct result of the credit crunch, the rising cost of living and no pay rise for three years. Those who can afford to say "sod it" were never going to be worried by the dreadful state of play that exists at the moment anyway and this lucky group of people gets smaller by the day. Will next year be any better for Joe Public? of course not. So will margins be cut? of course. So thank you for the positivity but the reality is far different.

By Alexander Carraro, Monday, June 30, 2008