Mall of America

Published on Tuesday, March 24, 2009

Holidays - a basic need for Western Europeans




Economic crisis and changing travel patterns in Western Europe
- TravelMole Guest Comment by Angelo Rossini, Euromonitor International research analyst

Consumers throughout Western Europe still have the travel bug and are reluctant to renounce travelling all together even though the economy is pressurizing them to pull back on unnecessary spending.

As a result, during the current financial and economic crisis, people with financial constraints or reduced consumer confidence are less likely to cancel their holidays and instead will choose cheaper travel options.

A key difference between the current crisis and the crisis caused by the World Trade Centre terrorist attack in 2001 is consumers’ confidence in the safety of travel.

In 2001, consumers were scared to travel because of the terrorist threat. However, today travellers are keen to take holidays to escape from the hard economic conditions.

On the supply side, it is important to identify, create and promote travel deals in line with consumers’ expectations as this will help drive travel and tourism demand through the downturn.

Changing travel patterns

The internet and low cost carriers have had a very significant impact on travel habits in Western Europe over the last ten years, offering more choice and value for money to travellers.

People are now used to travelling low cost, having transparent pricing, customisable travel services, and the popularity of traditional package holidays is on the decline due to the lack of flexibility.

The current economic crisis is expected to have an immediate impact on travel patterns, accelerating a process that had already begun before the downturn. Industry players will have to react quickly to stay competitive.

In these times of crisis, travellers are putting a premium on getting value for their money.

Holiday destinations which are less expensive, such as Egypt and Turkey, will be favoured by the crisis and are expected to record a growth in number of arrivals between 3% and 5%.

Similarly, domestic tourism in countries such as Germany and the UK is expected to achieve positive performances in 2009.

Customised trips as opposed to traditional packaged holidays will also benefit by offering travellers exactly what they want without having to pay extra costs for travel services they do not need.

This trend will benefit dynamic packages, tailor made trips, sale of travel components, and all travel offers allowing customers to assemble their favourite travel services enjoying a discount at the same time.

On the other hand, sales of travel packages are expected to record a decline by 2%-4% in most Western European countries.

The impact on the travel and tourism industry in Western Europe

These developments are expected to have a significant impact on the Western European travel and tourism industry as it will likely emerge from the crisis in a different form altogether.

Destinations and companies that are able to offer travellers more value for their money, customisation and match client needs will come out fighting.

Thomas Cook is an example of travel and tourism player which reacted swiftly to the new challenges posed by the crisis, adjusting its offer in order to match customers’ expectations.

Its current offer is completely focused on travel deals and on destinations such as Turkey, Tunisia and Egypt, able to offer exotic holidays at reasonable prices. Moreover its website has been equipped with advanced search options allowing customers to build completely customised holidays, and even choose the maximum budget to be spent per person.

Other examples of travel and tourism companies that are adjusting their offer in line with the new customers’ expectations are Accor and Lufthansa, which are both aggressively promoting their travel deals. Accor by offering significantly discounted prices for early bookings, Lufthansa by selling several seats at prices competitive with the offer of low cost carriers.

Turkey is an example of destination which is designing its 2009 tourism promotion campaign in the light of the changed economic conditions and travel patterns highlighting the value for money tourism in the country offers in its marketing communications.

 
 
 
 

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