Conference Preview: Travel bosses discuss Brexit, the market and over-50s

Conference Preview: Travel bosses discuss Brexit, the market and over-50s

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Travel chiefs discuss a possible Brexit, terrorism, PPC advertising and demographics ahead of today's event at the British Museum in London

Brexit ‘would give free rein to UK’s protectionist bodies’

A vote in favour of Britain leaving the EU risks a much more protectionist approach to regulation in the UK travel industry, it has been warned.

Leading industry accountant Chris Photi said the EU had acted as a brake on the CAA and Abta imposing more-stringent rules.

Photi said: “Europe has held back Abta and the CAA massively. What worries me is Brexit will give these organisations free rein to bring in even more regulations.

“We already have the Rolls‑Royce of protection regimes in the UK – it’s going to become the Bugatti Veyron. The problem is most of us aren’t Rolls-Royce drivers, it’s too high-end.”

Photi, a senior partner at White Hart Associates, said it was an indictment of UK regulators that they had “never embraced Europe” because there had never been a mechanism for UK firms to freely sell on the Continent.

However, he said the new Package Travel Directive, which has been approved by the European Parliament and has to be enacted by member states by 2018, will change that.

It says firms can be regulated in their place of establishment, rather than where they are operating, and is expected to open up the EU to greater cross-border competition.

Photi predicted a close result in the June referendum, but said he believed the British public would vote to remain in the EU.

“Business people will have their say in that regard,” he said.

“The bottom line is that we are conservative by nature and do not like change. Older people are going to think we had better stay in.”

Other senior travel executives asked to give their views agreed that staying in the EU would be better for the travel sector.

There was particular concern about the uncertainty a leave vote would cause and the impact on foreign exchange, with the value of sterling expected to plummet.

Paul Evans, Lowcost Travel Group chief executive, said: “I live in Majorca and I do not like this ‘little Englander’ attitude.

“I like the free movement of people and trade. It’s great that people can do that.

“There’s nothing worse than a small-minded mentality of ‘not in my backyard’ and protectionism. I think it’s dreadful.”

Evans added: “The most unfortunate thing is that this is going on at the same time as the Syrian war and refugee crisis, and the two are becoming confused. We have to take a longer view.”

Chris Galanty, UK managing director of Flight Centre, said: “Who knows what will happen in the long term, but in the short term there will inevitably be uncertainty.”

Jo Rzymowska, Celebrity Cruises’ UK managing director, said: “I think it’s in all our interests to remain in. I think we are better together than alone.”

Steve Jenkins, chief financial officer at STA Travel, said: “The biggest impact on our business and on travel as a whole will be the uncertainty.”

Dermot Blastland, non-executive director of Love Holidays, predicted up to five years of uncertainty if there was a Brexit vote, as the terms of the exit were agreed.

But he said the UK was already a semi-detached member of the EU and, although there would be a short-term impact on exchange rates, it would make little difference in the long term.

Agents face ‘difficult year’ due to bedstock storage

The impact of terrorism on key destinations is going to make 2016 a difficult year for agents, particularly those trading online and reliant on lates business for peak summer.

With Tunisia and Egypt in effect closed, and Turkey down by as much as 50% to 60%, some agencies are expected to be unable to find bedstock elsewhere to sell.

That was the view of industry accountant Chris Photi, who said one of his OTA clients had a rule of thumb to not have any destination representing more than 10% of its overall business.

But he said that was impossible to maintain this year because it couldn’t find alternative capacity to make up the shortfall.

“You have to question where are they going to make up that capacity,” said Photi. “It’s going to be a difficult year. Traditionally, online agents do well in the lates.”

However, Lowcost Travel Group chief executive Paul Evans was more positive about the prospects for this year, saying there were plenty of airline seats and beds.

He conceded that popular destinations such as Spain would sell out in the peak six weeks of summer, but claimed talk of ‘sold-out’ signs being put up was hype.

“There is a little bit of PR going on from hoteliers who have had a few years of being relatively empty,” said Evans.

“Spain has not been full for 
eight years; now, all of a sudden, they are licking their lips. You just have to look at the pricing to see what’s going on. Airlines are discounting heavily.

“Cleary, high season is going to be full – no one is arguing about that. The family market is tough. That’s why you should book early.”

Terrorism attacks soften US cruise market to Europe

Paris terrorism

The recent terror attacks in France and Belgium have led to a softening of the US cruise market to Europe, according to the UK managing director of Celebrity Cruises.

But Jo Rzymowska said the global nature of the cruise sector ensured it was less dependent on the North American market today than it used to be.

“The benefits of being a global organisation mean we have so many markets filling our ships worldwide. The Caribbean and Alaska are doing very well from North America, but there has been a softening of North Americans travelling to Europe.

“That said, there are thousands and thousands who are. Therefore, from a Europe point of view, things are holding up well.”

Rzymowska could not say whether cruise was benefiting from the impact of terrorism, as it was viewed as a safe option.

But she said there had not been
a fall in demand for cruises visiting Turkey, although Celebrity had cancelled overnights in Istanbul.

‘Capitalise on potential of over-50s sector’, agents advised

cruise ship

Older travellers are becoming more adventurous, more active and more likely to travel in larger 
multigenerational groups.

Travel executives who gave their views during the Barclays Travel Forum filming day said they regarded the over-50s sector as offering huge potential.

Chris Galanty, Flight Centre’s UK managing director, said: “Over-50s are no longer seeing themselves as taking relaxing holidays.

“We are seeing demand for a lot more active holidays with cycling and soft adventure, and also in the traditional cruise market.

“The market is so much more varied and people are taking more and longer holidays.”

Celebrity Cruises’ Jo Rzymowska said: “Fifty is the 
new 40. We have seen a significant change.

“People are younger, fitter, healthier and far more adventurous, and absolutely determined to spend the kids’ inheritance.”

Retailers and operators were having to keep pace with changing demographics and demand, said STA Travel chief finance officer Steve Jenkins.

“Travel companies need to focus more on consumer experience from the start to the finish, both in terms of a mobile and offline experience, to make it seamless and user-friendly,” he said.

“Improvement in customer service is a key thing for travel companies.”

Highlights of Barclays Travel Forum 2016

This morning, 300 invited guests from the UK travel industry will gather in London for the 11th annual Barclays Travel Forum. Here is what they will hear discussed 
and debated:

  • Richard Lowe, the London managing director of Barclays Corporate Banking, will give his views on how travel compares with other business sectors.
  • A ‘state of the nation’ economic update will be given by Graham Pickett, lead partner in travel, tourism and leisure at Deloitte.
  • The luxury and mature traveller sectors will be looked at during a panel session with Ian Simpkins, Audley Travel chief executive, and Debbie Marshall, Silver Travel Advisor managing director.
  • Three of the UK’s biggest consortia will debate the role of travel agency groups and the advantages of being a member. Panellists will include Advantage Travel Partnership managing director Julia Lo Bue‑Said , Global Travel Group managing director Andy Stark and Gary Lewis, The Travel Network Group chief executive.
  • Alex Horne, former chief executive of the Football Association, will talk about serving the customer, drawing on his time managing events at Wembley Stadium.
  • The key issues affecting travel will be debated by three experts: former Travel Republic chief executive Kane Pirie, Best At Travel founder Rita Sharma and Canadian Affair managing director Kathryn Munro.
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