Steve Endacott, chief executive, On Holiday Group
During the ash cloud crisis of 2010, holiday sales suddenly dropped by 25% as customers sat back and assessed how long it would be before planes could fly again.
In other words in travel sector terms this was a major event.
So it’s a bit of a shock that a simple heat wave over the last week has had a similar level of impact on sales, with most major OTA’s reporting sales down by more than 20%.
To be honest few of us saw this coming, having expected a decent lates market without the distractions of a Euro football tournament, the London Olympics or a Royal Wedding.
Like most business owners in travel I have been desperately looking around for an explanation and an idea of how long this weak demand may last.
Unfortunately my personal conclusion is that it will probably last as long as the heat wave does, and rather than delaying the booking decision, it may be simply removing customers from the market.
A combination of recession and electronic evolution would seem to have increased the vulnerability of the commodity sector of the UK travel market to good weather.
As per my previous blogs, I like to categorise the holiday market between the “haves” and the “have nots”.
The “haves”, with their jobs and low mortgages, have never been better off and are happy to trade up to the “differentiated” holidays offered by the major tour operators.
The “have nots”, who traditionally book late using credit cards, have been impacted more by the recession and hence, when a heat wave hits, it’s very tempting to shelve the overseas holiday and just sit in the garden.
We also need to take into account the electronic evolution that has occurred over the last five years.
Like many parents I used to dread the long summer holidays and the difficulty of keeping kids entertained at home.
However, these days with the advent of high speed internet, X-Box, PlayStation, video-on-demand and Sky TV, kids have never been happier sitting at home enjoying the electronic world.
As an industry I think we should recognise this threat and push our hotel and tourist board partners on the importance of investing in free high speed Internet in all holiday hotels.
If we cannot provide the connectivity our kids demand in life, don’t be surprised if they start refusing to go on holiday with their parents to destinations that only offer a beach and a pool.
It may have been good enough for us as kids, but it’s clearly no longer good enough for this generation.
So when the kids are happy at home and the parents can get a free tan in the back garden, I suppose a 20% drop in relatively expensive school holiday sales should not actually be as a big shock as it felt this week.
However, before we all get too depressed I think we should remember that summers like this statistically only occur every 13 years and for the majority of the time UK summers are complete rubbish.
So let’s all do a rain dance and hope things get back to normal – sooner rather than later.
The above article was reproduced with permission from the On Holiday Group blog
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