Market trends, industry regulation and the challenge of marketing to younger generations will be discussed at next Wednesday’s annual event. Lee Hayhurst reports
Package Travel Directive: ‘New Rules will confuse’
New Linked Travel Arrangements (LTAs) in the revised EU package travel legislation will cause confusion, according to leading high street agent Trailfinders.
Tony Russell, managing director of the firm, which operates 28 stores in the UK and three in Ireland, said: “At the moment I think it’s very confusing.
“If it [Package Travel Directive] proceeds in its current form, confusion is going to reign.
“I don’t know how linked arrangements are going to work in practice.”
A category of travel known as LTAs has been included in the new PTD to cover click-through sales that would be covered by Atol, but not offer full protection.
Russell said he feared some firms would exploit LTAs to avoid full regulation and suggested Brexit was possibly an opportunity for the UK to revisit the rules.
However, he warned that Brexit could also be exploited to reverse more welcome EU rules, which prevent firms from profiting from payment card charges.
The new EU Payment Services Directive II (PSD2), due to come in in January, will outlaw charges for most credit and debit cards.
Trailfinders does not levy any charges, but Russell said many travel firms contravene existing rules that state they can pass on to the customer only the amount it costs them to process payments.
“It’s very frustrating to see a competitor charge 2% or 2.5% which you know is probably against the law,” he said.
“You have PSD2 coming, which outlaws all credit charging. Will that be revisited post-Brexit?”
Over 50s market: ‘This is a golden generation’
The current over-50s market is a one-off “golden generation” that is unlikely to be repeated, industry experts at the Barclays Travel Forum filming day agreed.
Final salary pensions, rising property prices and increasing prosperity among older people make them a lucrative target market for many travel firms.
Although wealth is expected to cascade down, generations that follow are not expected to have as much wealth, although they will prioritise spending it on travel.
Jeremy Griffin, founder of escorted tours specialist Newmarket Holidays, said it finds itself marketing to an increasingly tech-savvy 50+ client base.
“This is a golden generation,” he said. “In some respects that may make you concerned about the future beyond them.
“But the balance is that there is going to be a cascade of wealth; not all of these people will spend all of their resources.”
Griffin said all retailers are seeing a shift away from purchases of things like clothes and household goods to a focus more on experiences and going out.
He said travel is becoming more affordable and that younger generations place increasing value on holiday experiences that are ‘Instagrammable’ and shareable on social media.
Trailfinders managing director Tony Russell described the over‑50s as a “one-off generation” and warned: “It may be a structural fault line in the economy.”
Alison Zacher, Flight Centre’s retail managing director for the UK and Ireland, expected younger generations to have less money tied up in possessions like cars.
“It’s surprising how much disposable income younger generations have,” she said.
“People these days tend to spend money on technology and experiences.”
Zacher said Flight Centre’s three main customer segments are baby boomers, young families and affluent families with parents aged 30 to 36.
“They’re all kind of the same person just growing up,” she said.
2017 market: Google data shows good start
Travel has seen a good start to the year fuelled by competition pushing down flight prices, particularly for long-haul destinations such as Australia, southeast Asia and Canada.
Ruairidh Roberts, Google travel industry head, said its search data showed demand had been strong across the board for travel, except in the packages sector.
Google data in January showed fewer people searching for package holidays, but a higher conversion rate. In April the reverse was true.
Roberts said the time people take to research for travel is falling from the usual 70 days from departure, meaning the number of searches is down, but not the number of people searching.
“Overall we have seen pretty strong demand, particularly in long-haul. People are booking later, so the lates market could be good.”
Trailfinders managing director Tony Russell said January and February were “way ahead” of expectations, but there was a softening in April, which he put down to the timing of Easter.
“I would not read too much into that. Let’s see what happens in May,” he said.
Newmarket Holidays founder Jeremy Griffin predicted a “challenging” year due to Brexit and the general election. He said he had seen a reduction in US bookings since Donald Trump’s election.
Recruitment: ‘Young staff need to earn stripes’
Firms need to impress on young employees that they need to “earn their stripes” and work on their people skills before they are ready for senior positions.
Barbara Kolosinska, director of travel specialist C&M Recruitment, said: “Young people are extremely ambitious but they need to realise there is a path they need to take.
“Technology plays a huge part, but young candidates need to gain experience and respect, learn about the industry and develop interpersonal skills.”
Kolosinska said firms are struggling to find skills in areas like digital marketing, meaning although there are more candidates than roles, it is still a jobseekers’ market.
She welcomed the new government apprenticeship levy to boost training and development funding but said small businesses needed help to take advantage of it.
Barclays Travel Forum 2017 speakers
The 2017 Barclays Travel Forum on May 10 will focus on the economic outlook, Brexit and the state of the market as well as aviation and industry regulation.
There will also be a special focus on what travel firms need to understand about younger generations with insights from the editor of Cosmopolitan and the founder of app developer International Celebrity Networks.
Chris Lee, Barclays head of travel and professional sports, will welcome a full house of about 325 delegates to the annual event.
It will culminate in a rare interview with Southall Travel founder Kuljinder Bahia, whose travel agency has grown into one of the giants of the sector with a £600 million annual turnover.
Speakers include:
Richard Moriarty, deputy chief executive, Civil Aviation Authority
Christine Ourmières-Widener, chief executive, Flybe
John Strickland, aviation analyst
Anthony Risbrook, chief executive, Hillgate Travel
Farrah Storr, editor, Cosmopolitan
Geoff Baker, founder and chief executive, International Celebrity Networks
Graham Pickett, global lead partner, aviation and travel, Deloitte
Mike Saul, managing director, hospitality and leisure, Barclays