| Journal: TWUK | Section: |
| Title: | Issue Date: 17/07/00 |
| Author: | Page Number: 8 |
| Copyright: Other |
Analysis
Industry holds its breath as season peaks
Operators will be watching the next few weeks’ trading with baited breath. Will summer 2000 be a washout or a winner? Steve Jones reports
THE next eight weeks will make or break operators as the industry moves into the critical peakseason.This is the relatively small timeframe when operators hold their breath, keep everything crossed – and hopefully make their money.
Sources claim that between 70%-80% of profits come from peak season sales.
And despite the endless debate and wild prediction, it is only when this two-month period between July and September is underway that operators will get an accurate picture of the market.
One industry observer commented: “May and June were poor but when weren’t they? It doesn’t mean the rest of the season will follow suit.”
First Choice sales and distribution director John Wimbleton refuted claims the industry is heading for disaster.
“It is nonsense to say the market will be another 1995,” he said. “Five years ago we couldn’t fill aircraft – that is not the case now. It’s starting to look OK with prices beginning to harden.”
He claimed booking patterns had changed with customers no longer feeling the need to book the first two weeks of August 10 months in advance.
“It’s not necessarily because they feel they will get a cheaper deal,” he said. “More prices will go up than down during lates.”
Thomas Cook commercial director Mike Beaumont said summer 2000 was too early to call although he admitted prices need to harden.
“It’s too early to make conclusions, it’s in the balance,” he said. “At the moment the aircraft are selling out but the prices are not high enough.”
He said a price differential of £40 on average will make the difference between a good summer and a bad one.
“Late sales are such a moving feast that prices can be altered quickly,” added Beaumont. “Some individual flight prices are changed four times a day. Last week we did have some movement upwards, with prices rising around £15-£20 on average.”
Urbanweb managing director Steve Endacott predicted a poor year, although he too admitted it was in the balance.
“It’s my opinion that the market will struggle – prices are hardening but not quick enough,” he said.
JMC sales and operations director Denis Wormwell said: “Everyone has been holding their nerve but it’s around now when peak departures kick in that we can tell what sort of year the industry will have.
“It will be tough but sales are coming in for peak. It’s about yield management and knowing what and when to discount.”
Wormwell said JMC is selling lates at around £23 more than last year and last week sold 2,500 more August holidays than the same week last year.
Cosmos sales and marketing director Paul Riches said while summer 2000 is unlikely to be a bumper year, the jury is still out.
“Operators will be on the edge of their seats and it is the time of year when the commercial guys earn their money,” said Riches. “A lot now depends on how much has been sold at brochure price earlier in the season. If what they have is manageable, they could clean up nicely.
“No-one is discounting late July departures yet and until they do, it is hard to say what will happen.”
Thomson was also positive with sales director Manuel Mascarenhas insisting he was chasing margins, not volume.
“If there is too much capacity in the market then it hasn’t come from us,” he said.
The entire overseas market was upbeat about one thing – the dreadful British weather.
Travel Choice managing director Gerry Reilly said: “I saw a newspaper billboard saying ‘weather set to worsen.’ I thought it was great news.”
n See Columnists, page 13
A moveable feast: prices can fluctuate wildly in peak season but it’s still too early to tell how this year’s sales compare with last year’s
quotes
“We had a poor May and June but these days you can’t take kids out of school at the drop of a hat. This was the first year it had an effect.”
Kevin Abbey, managing director, Bakers Dolphin
“Customers are booking at different times of the year and we believe there is still demand. No-one is really panicking.”
Philip Ordever, commercial director, Travel Choice
“It’s not going to be a bumper year and everyone is on the edge of their seats. It’s the time of year where the commercial guys earn their money.”
Paul Riches, sales and marketing director, Cosmos
“It is nonsense to say the market will be another 1995. Five years ago we couldn’t fill aircraft. That is not the case this year.”
John Wimbleton, sales and distribution director, First Choice