It is only a matter of time before the leading travel groups become “serious players” in the accommodation-only sector, Youtravel.com sales and marketing director Paul Riches has warned.
A window of around 18 months remains before the major operators sort out their accommodation-only businesses following the planned mergers, according to Riches. “It will take at least 18 months for the majors get their act together,” he said.
Riches, speaking at a trading update lunch, gave his prediction as Youtravel reported on its first six months of trading and admitted less than 10% of its summer bookings are for travel in August as holiday-makers continue to book late.
A traditional tour operator selling packages would expect to have sold 60% of its product by the start of May, and have around 40% of its August product sold, according to Riches.
Peak summer sales are not as good as hoped, he conceded. “It’s slightly less than we would like or anticipate but you have to adapt to it. There are some areas where we have rooms we have got to make sure we fill but we are not worried.”
Around 60% of the accommodation-only supplier’s business is booked within six to seven weeks of departure in a market currently flat compared with last year, he added. “We believe the market is getting even later,” he said.
Riches claimed Youtravel had proved many critics wrong by thriving in a tough market in its first six months. So far 2,000 agents have signed up to work with the company, which has adopted principal status.
“Many people said we came into the market too late and missed the boat. I don’t think the boat has even set sail.”
The company is on target to achieve £40 million turnover in its first year and £120 million within three years.
In its first six months its top-selling destination was Egypt. The company predicts Turkey and Greece will lead growth for dynamically packaged breaks this summer.
The company has appointed ex-First Choice activity division boss Nigel Jenkins as non-executive chairman from June 1 to work on growth strategies. He retired as managing director of First Choice Activity Holidays last October.