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Industry split over summer trading predictions – 14 June 2007

The next 10 days are a crunch time for the trade as the market continues to prove tougher than expected and fears rise of company failures.


With the market still experiencing flat trading year on year, operators have admitted the amount of “bounce back” in sales levels compared to last year will be critical over coming days.


This time last year, the football World Cup, followed by hot weather in the UK and security alerts at airports led to one of the worst summers for the trade in 30 years.


Speaking at the Institute of Travel and Tourism conference in Gran Canaria last week, Thomas Cook chief executive Manny Fontenla-Novoa warned: “A lot of companies have built in growth and we are not seeing it. The industry has begun to plateau. If we hit tough times, a lot of companies face serious problems.”


Another one of the big four insisted sales had started to bounce back in the last few days but admitted recovery levels were critical to summer trading and prices.


“The question is will it bounce back 5% or 25% on last year. It’s understanding what demand is like, and then you can look at pricing,” said the source.


Cosmos sales director Andy Washington said package sales are down 5% this year, although Somewhere2stay.com’s component-based sales are up 85%. “Holidays are still selling and while the package market is flat, operators need to be flexible enough to meet this demand,” he said.


Advantage chief executive John McEwan predicted a last-minute rush as consumers wait until within six weeks of departure to book. He added: “There’s too much capacity in the market, and at the moment, you can pick up holidays for £49. You’d have expected June to have bounced back but it hasn’t yet.”


Independent agents were more upbeat. Traveltime managing director Barry Moxley said his agency’s sales were 8%-10% up on last year. “Most people are having an average year but there seems to be a sense of optimism,” he said.

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