Online travel sales hit in wake of ash crisis
Wednesday, 21 May, 2010
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Sales of tickets and travel online dropped by nine per cent in April due to the disruption caused by the volcanic ash cloud.
The decline over March came as flights were cancelled and fears of the volcanic eruption’s long-lasting effects set in.
While sales increased by five per cent year on year, this growth is lower than the market average, according to the latest IMRG Capgemini e-Retail Sales Index.
Total online sales increased by 13% in April compared to last year, with shoppers spending £4.4 billion worth of goods.
The Index shows an overall three per cent decline month on month, in line with seasonal trends for April when Mothering Sunday falls in mid–late March.
Tina Spooner, information director at IMRG added: “We continued to see double-digit growth in the online retail sector during April, with the home and garden sector recording particularly strong growth of 32% year-on-year.
“The fine weather seems to have encouraged DIY enthusiasts and gardeners to get spending online, resulting in the average basket value for home and garden retailers soaring 64% compared to the same month last year.
“Conversely, growth in the travel sector slowed to just five per cent in April, after recording yearly growth in double figures during February and March. This may be an early indication of the impact of the volcanic ash cloud on the travel industry.”
Bruce Fair, managing director of Kelkoo UK, said:“The recession cost the UK travel industry £3.7 billion in 2009 and it looks like the sector will need to buckle its seat belt for another bumpy ride in 2010.
“Just as forecasts were indicating a modest financial recovery, with sales set to increase by 2.4% (£1 billion) this year, the Icelandic eruption threatens to throw cinders on the travel industry’s recovery.
“The recent chaos has already cost the airline industry £1.3 billion worldwide. This growing bill will inevitably be passed onto unsuspecting consumers in the form of increased travel costs.
“Our latest research revealed that flight prices are set to rise by five per cent over the next year as a direct result of the ash cloud, rising operational costs and escalating oil prices.
“This means consumers will be forced to pay £1.8 billion more for travel in the next 12 months, with the average cost of a flight to New York set to creep up £62 per ticket.”
Holiday Extras head of sales David Stratton added: “HolidayExtras.com has taken a hit since the volcanic ash disrupted UK air space; at the height of the chaos we were receiving cancellations at a rate of 1,000 per day.
“Our immediate concern was to help our customers and our partners’ customers – many of which were stranded thousands of miles away, and we believe this dedication to customer service will lead to these customers returning to book again with HolidayExtras.com and assist long-term growth.”
by Phil Davies
Phil Davies
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