What will be the biggest challenges for the trade in 2012? From the economic crisis to major sporting events and Air Passenger Duty, a cross-section of the trade give their predictions on what issues business could face during the year ahead.
Ben Reid, chief executive, Midcounties Co-operative
“For 2012, there is not only the general economic situation to consider, but the instability of the tour operating and travel agency market place with the shift that has taken place at Thomas Cook. The Thomas Cook of 2012 is not likely to be the Thomas Cook of 2011. There will be a shift in its product and a reshaping of business that will have an impact on agents. Agents are going to have to make a choice about how they supply product to their customers. If you add to this the closure of agencies across the country, there will be a lot of shifting sands. There are significant opportunities for independent retailers if you are nimble and can react to the market. The trend continues to be a move away from the standard catalogue-driven travel agents to more service-led agencies, but the speed of this trend increased in 2011.”
Mark Tanzer, chief executive, Abta
“With the Eurozone crisis still unfolding, continued pressure on household incomes, and low growth forecast, 2012 promises to be another tough year for the economy and this will inevitably squeeze UK travel businesses. That said, our research shows the British public are committed to their holiday above many other items of discretionary spend and in 2011 we saw just how resilient and adaptable UK travel businesses can be in the face of a difficult economy. This ability to adapt and determination to succeed will help the vast majority of travel businesses to navigate through another difficult year.”
Ian Scott, UK director of Dubai Department of Tourism, Commerce and Marketing
“We are assuming the desire for value and affordability without compromising on quality will prevail in 2012. I don’t think people want to increase their spend but they still want memorable experiences. That presents us with a real challenge. With Dubai there is no issue when it comes to quality but we know people do not equate the destination with value. Our challenge is to marry up this desire for quality of product and educate and promote the fact Dubai is not just about brands like Armani. It puts all of us in the trade in a difficult position; customers are demanding the world for half the price of the world. Somehow you have to match this up.”
Kate Harris, Travel Weekly 2011 cover star, owner of travel agency Inspired Travel, Hinckley, Leicestershire
“The challenge has got to be for some of the big tour operators to value independent agents. If they valued us they would not undercut us with their direct sales channels. Even when Thomas Cook was at breaking point it never thought about encouraging bookings through independent agents. The industry doesn’t have to be price-led. The gut reaction of operators seems to be to slash prices but discounting teaches people the wrong lessons. At the moment I don’t know what the signs are for January and February; normally I have an idea by now. I would like to think January will bounce back but I am not convinced.”
Graham Balmforth, national sales manager, Superbreak
“Sports events next year – the Euro football championships in June and the Olympics in July and August – will be a challenge for the whole industry as people don’t tend to go on holiday during these events and there is even talk of London theatres shutting during the Olympics. On the positive side, lots of people will watch London and there will be new hotels and post-games tours. The capital will be a place to see after the Olympics. We also have new tours next year of the Harry Potter filmset and Eurostar packages to Paris, which we see as the new London.”
Miles Morgan, owner, south-west agency chain Miles Morgan Travel
“Undoubtedly it’s going to be the economy that’s the biggest challenge next year, and just surviving. No-one can tell you how long the economic crisis will last; it’s something many in the trade are experiencing for the first time. The comfort we have is that the lion’s share of our clients have indicated they have not booked yet so there is a lot of pent-up demand. The question is will they book and when.”
Mark Pilkington, head of sales, Complete Cruise Solution
“Agents selling cruise will need to focus on service and expertise, rather than price, to succeed. We’ve launched the Academy in summer 2011 to help with this and have already had nearly 150,000 modules completed by UK agents on the 75 courses we offer. Agents who have reached Commodore status are already finding it easier to win new business and retain and upsell existing customers. The other focus for our business in 2012 is going to be on world cruises and exotic winter holidays. On P&O Cruises and Cunard alone we have seven ships on world cruises next winter, compared with just one ship in the Caribbean. This means that we are going to be working closer than ever with agents and tour operators who are able to help us to grow demand for these high-end holidays.”
Charles Duncombe, director, online travel agency Holidaysplease
“2012 will be full of irregular consumer demand. Consumers are going to get spooked by continuing bad economic news such as unemployment figures, euro/banking disagreements and travel companies going under. However, in my experience a lot of the spend is pent up during these periods and comes back stronger when the crisis drops off the front pages. Our customers say “I’ll be dammed if I’m not having a holiday!” and book after the crisis has blown over … or when it goes on for so long that they just get bored of it.”
Tony Seaman, group sales and marketing director, Attraction World
“My gut feeling is that next year will be as hard as this year. All businesses need to maximise sales opportunties. Independent agents need to get to grips with selling add-ons. From a general point of view, the eurozone crisis could impact on sales to certain destinations like Italy, Greece and Portugal next year.”
Kathryn Beadle, managing director, Hurtigruten
“One of the biggest challenges for next year will be Air Passenger Duty because the cost of getting to a destination will be so expensive in relation to what you are spending on accommodation. I also think there will be big challenges for the mass market and big opportunities for niche cruise lines, operators and agents because custmers want niche products. They have done the beach holidays and are happy to sacrifice that for a year. They want to do something different.”
Tony Byrne, national sales manager, Great Rail Journeys and Treyn
“One of the big challenges for next year will be the major sporting events; the Euro football championships and the Olympics. That said I still think people will travel but they may avoid London because hotel prices will go through the roof during the Olympics. There will also be some challenges getting people through London to Europe, to the horticultural expo Floriade for example.”
Dominic Paul, vice president & group managing director, UK, Ireland & Northern Europe, Royal Caribbean International, Celebrity Cruises & Azamara Club Cruises
“A challenging economy will continue to dominate in 2012 and could lead to a late booking market in some sectors. However, we have a great turn-of-year offer for Royal Caribbean and Celebrity Cruises to drive early bookings and the most expensive suites on the new Celebrity Cruises ship, Celebrity Reflection, have sold out first and in record time – evidence there is still consumer confidence and spending across the board. We can also expect to see continued growth in ex-UK cruising and with four ships sailing from the UK in 2012 we will be offering itineraries to less discovered regions such as the Adriatic and Scandinavia. The Euro football championships and the Olympics are great opportunities for us all but could also be challenging for some sectors of the travel industry – smart travel companies will have a plan of how to deal with the inevitable booking disruption these two exciting events will cause.”
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