Stinging attack on industry prior to Convention kick-off
Tuesday, 06 Oct, 2009
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The economic turmoil of the last year has changed the face of the travel industry for the foreseeable future, and companies must either adapt or go under, a leading operator warned today.
Hoseasons chief executive Richard Carrick, speaking prior to the start of the ABTA Travel Convention in Barcelona, accused the trade of having its “head in the sand”.
As a result, the industry has completely underestimated the “seismic shift” in consumer behaviour over the last 12-months.
He said: “Every day an announcement comes from one of the major overseas operators saying that ‘2009 hasn’t been a bad year’ and that things are ‘going to return to normal in 2010’.
“And frankly much of this is at best naive and, at worst, self serving and unsubstantiated.
“Some of these companies may have been able to get by in 2009 by heavy cost and capacity reduction to compensate for margin erosion from discounted late bookings, but to suggest therefore that 2010 will see a recovery in demand smacks of blind optimism.”
Carrick, who formerly headed Airtours, added: “There is a strong consensus emerging amongst economic commentators that while the severe recession has been avoided, and that predictions of a ‘30s depression were exaggerated, consumer confidence has been irreversibly affected.
“We are likely to continue to see a growth in unemployment, a reduction in public spending and a rise in tax and interest rates in the next 12 months. People are also carrying high levels of personal debt that built up through sustained borrowing and their focus is on cutting back and clearing debt, rather than spending.
“So what does this mean for the tourism industry? Well, people will travel and spend less, that is a certainty. They are also less likely to fly, as costs increase, frustration with air travel continues and we cut down on the number of additional ‘bonus’ breaks we’ve all been used to taking.
“The key for the travel industry will be trust – after 12-months of being let down by politicians and bankers.”
He claimed that household brands like his company and other established and credible holiday operators will survive and flourish, but only if they offer value, quality and flexible breaks.
“You could say there will be a ‘nostalgic’ element to their holiday experiences – placing trust in the companies that they travelled with during their formative years,” Carrick said.
“I’m not just saying this applies to the UK either, as people will still go overseas, but naturally I believe the UK will be well placed to capitalise on the sea-change in consumer trends, and UK self drive, self catering breaks offer the flexibility of being able to pack up the car and go, while still being able to tightly control your costs.
"The British consumer is also less dependent on weather than people think, with bookings remaining strong all year, regardless of predictions from the MET office, and 20,000+ breaks booked for 2010.”
by Phil Davies
Phil Davies
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