| Journal: TWUK | Section: |
| Title: | Issue Date: 03/07/00 |
| Author: | Page Number: 13 |
| Copyright: Other |
Currency movements, marketing investments or freak weather conditions can all affect bookings but the real reason for slow sales this year is the removal of zero deposits by the travel industry
TOM ALLEN
TOM ALLEN
By all accounts, summer 2001 is off to a pretty bad start and Florida is no exception.From what we are picking up, the overall market appears to be around 30% down, with Florida around 25% down.
We work in a complex industry and many factors impact our business. These include exchange rate movements, marketing investment by tour operators and destinations, the marketing activities of the travel industry, outside influences such as freak weather conditions and, of course, there are in-country factors such as consumer confidence, unemployment levels etc.
One important factor is that exchange rates have moved against us since summer 2000 brochures were priced, by about 7%. The pound recently fell below the $1.5 mark for the first time in many years.
I don’t believe this sort of movement has a dramatic impact on overall final bookings but it may account for a small part of the drop in bookings. Certainly internal economic indicators are fine.
In my opinion, by far the largest reason for slow bookings is the abolishment of zero deposits by the travel industry.
The steady movement of brochure launches back from August to April was stimulated by increasing discounts, free kids and no deposits.
The customer was coerced into booking much earlier than they naturally wanted. This year, the zero deposit has gone.
Ally this to the hype over last-minute offers on the dot coms and the incentive is to wait rather than book early. I have no doubt cancellation rates will drop dramatically as we move into the season.
The outside influence currently being touted is Euro 2000 and we should soon see whether or not this has been impacting bookings.
So what will happen? As long as exchange rates don’t worsen, I am relatively sanguine about their impact. If they worsen, we will start seeing all those clever articles about spending power and we may suffer a little. Costs are now pretty well fixed. We will be putting even more funds and effort into marketing Walt Disney World and Florida and I would not be surprised to see incremental investment from others.
We’ll wait to see how bookings go between now and January to see if the travel industry needs to react in terms of capacity adjustments and extra marketing. And we hope the hurricanes stay away. All in all, I am optimistic for Florida for summer next year and think the market will be at least flat this year and possibly end 5% up.
“This year, the zero deposit has gone. Ally this to the hype overlast-minute offers on the dot coms and the incentive is to wait rather than book early”