Comment by Jeremy Skidmore: Prepare for a tough January
January is always a crucial month for tour operators. But this year it is more important than ever. Across the board bookings are down, creating an untenable situation for many travel companies. Operators need early sales because they need the cash flow to run their businesses and fund their marketing campaigns. They also want a pretty good feel of how many holidays are going to sell in the summer so they can fine-tune their capacity. Unfortunately, I think it’s going to be a damp squib for many reasons. TUI managing director Chris Mottershead is right when he says January is still the most important booking period. But that’s a bit like saying package holidays are still very popular. They are, but their popularity, like that of the post-Christmas sales window, is diminishing. The travel industry has only itself to blame. The public has grown tired of operators hiking prices and then offering huge “discounts”. Most people believe they’ll get a bargain if they wait until the last minute to book a trip. Our industry also relies on a huge surge of people going sales shopping in January because they see attractive offers in travel agents’ windows and pop in to find out what it’s all about. But retail sales generally are expected to be down over the period because bargains are available year round. Many clothes stores started offering discounts long before the turkey was stuffed. Meanwhile, the recent announcement about putting sky marshals with pistols on board aircraft will do nothing to persuade those of a nervous disposition to get on a flight. It’s rubbish to say people will feel more re-assured about the increased security. With the government banging on about the threat of terrorism, most people will be wondering just how bad the situation is and whether they’re going to be joining the mile-high OK Corral club. It’s little wonder the stock market doesn’t think much of travel companies as a long-term investment. In this business they have to be resilient and no doubt most will survive and prosper. But don’t hang your hat on a buoyant January.
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