Travel industry bosses have warned capacity cutbacks next year could halt the growth of dynamic packaging and have urged small operators not to take on too much commitment.
The comments follow Thomas Cook’s announcement it is slashing capacity in its MyTravel tour operation by 15% this winter and up to 23% next summer, in addition to TUI Travel’s decision to cut capacity by 11% for this winter and 12% for summer 2008.
Hotels4u.com sales and marketing director John Harding told the Guild of Travel and Tourism Question Time seminar at World Travel Market, chaired by Travel Weekly editor Sarah Longbottom, that if airlines pulled out of routes, demand would gradually disappear.
He said: “Smaller operators can survive if they don’t take on too much commitment. Capacity is key if it isn’t there then the market for dynamic packaging can’t grow.”
However, some believe the capacity cutbacks will be positive for smaller companies.
Monarch Airlines managing director Tim Jeans said: “With the big four becoming the big two, there are 16 aircraft coming out of the UK market next year. Niche operators have a bright future. At Monarch we think our time may have finally come.”
Sunvil Holidays managing director Noel Josephides said: “I don’t think there’s any doubt smaller operators will survive. But next year it won’t be so easy to access flights to some places because the capacity is not there.”
Mintel UK senior insights manager and tourism analyst Richard Cope added: “We see the larger companies surviving only if they take over more small operators.”
Travel Counsellors chairman David Speakman said the big two travel companies will be under “massive pressure” despite making more money as a result of the rationalisation.
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