Opinion: They're calling it a recovery, but it isn't - yet

Opinion: They're calling it a recovery, but it isn't - yet

Johnny Pollard, commercial director, On The BeachFrom reports in the travel and national press during the past week, it would seem a minor recovery in trading is under way.

Spain and Portugal are up year on year, according to reports, and Greece had started to recover along with Egypt, in particular Sharm el-Sheikh.

But prices in Spain, especially the Costas, have been slashed to shift hefty allocations and get some money back.

Of course people are going to book these destinations if they are half price. If a new Ferrari was 50% cheaper there would be twice as many sold, but that wouldn’t increase the dealer's profits or cashflow.

Bookings for Greece are on the up, but isn’t this simply a knock-on effect from Spain and Portugal? As the resorts fill up, especially in the Canaries, the customer is forced to consider other destinations.

With inflated flight prices during the summer holidays, customers will no doubt have to forego some quality in their accommodation. Those who usually book a four or five-star all-inclusive hotel might now choose a three-star to fit in with the family’s budget.

There is still a long way to go before we can get excited about a full recovery. Until prices and profits have got back to a reasonable level, and until our economy starts to stabilise, which looks unlikely for the next couple of years, then we are probably jumping the gun in terms of celebrations.

Rising cost of oil

One thing we all have to look at again is the rising cost of oil. Airlines hedge fuel to keep costs down, and I am pretty sure that in the next 12 months the previously ‘cheaply hedged fuel’ purchased at about $70 a barrel will start to run dry.

The next price level is more than $100 a barrel, which means only one thing: higher fuel costs and higher prices for the consumer.

Together with a second government tax to be added to all flights, recovery looks a long way off in our sector.

On a positive note I was glad to hear the government is considering bringing airlines into the new flight-plus scheme if they sell other holiday elements.

The tireless government lobbying by Abta must have played a big part in this decision. Abta’s Mark Tanzer, John McEwan and Luke Pollard should be congratulated for getting the government to listen to us.

Now it's time to support Travel Weekly's Every Seat Safe campaign to bring airlines into the Atol scheme.


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