MyTravel tries to quell ‘consumer hysteria’
MyTravel wants to get the message to consumers that the company is still profitable and their holiday bookings are safe, but an industry analyst said MyTravel will only thrive if it adapts to the changing market.
A spokesperson for MyTravel said the company wanted to reassure customers that holidays were still bonded with ABTA and the CAA. She said that what started out as a financial warning to The City, has dented consumer confidence and created consumer hysteria.
In its defence, MyTravel is arguing that it will report a profit for 2002, and that the bulk of the £50 million that was wiped off profit expectations last week – between £15 and £30 million – was attributed to a move to more prudent accounting methods brought in by new auditors. The spokesperson said that a smaller proportion, amounting to £12 million was due to an unanticipated downturn in UK trading at the end of the summer.
Travel industry analyst, Mark Riseley from GartnerG2 told TravelMole: “One of the things MyTravel are starting to understand is that the market is moving away from the ‘build it and they will come’ approach. The market has matured, and now operators and agents aren’t the only way to go on holiday.
“The tour operator industry is perhaps too focussed on increasing market share and not enough on adding value. It is possible that other groups like TUI have taken the longer term view.”
MyTravel is expected to report a profit of around £20 to £40 million, when it releases it’s financial results on 26 November. Bookings for summer 2003 holidays are currently 44 percent ahead of this time last year.
UPDATE 29-Oct-2002: MyTravel shares fell another two pence yesterday to 18 pence, compared to a high of 283.5 pence earlier this year.
Read our previous stories from the ABTA Convention 2002:
Carrick makes robust defence of MyTravel
Rivals consider switching off MyTravel
Industry reports tough year
New rule on consumer protection
TUI plans image boost for Thomson
JMC an expensive waste – some might say
Differentiation the key for agents
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