The industry is now a few weeks into the lates market. As is the case every year, there are already murmurs of a bloodbath as companies battle it out on price to get critical late bookings for this summer.
The market has changed, however, with the late booking trend more pronounced than ever. This means companies are relying more heavily on bookings being made in the next eight weeks before the school summer holidays.
For many, it is a case of making the best of a bad situation. Booking figures are unlikely to recover to a positive year-on-year position, but there is room for some recovery if they can make deals attractive enough for the couples-dominated late booking market.
Until now, the clear trends in the market have been for all-inclusive holidays and non-eurozone destinations. Both are linked to consumer reaction to market conditions: holidaymakers budgeting in the face of financial pressure and looking at where their pound will go further.
This trend has been well documented in the press and is evidenced in results from major operators. It is likely to continue. Only this week, TUI Travel’s latest trading figures showed Egypt and Turkey are still reaping the benefits of the non-eurozone trend.
But there are signs of a supplier-led shift back to certain eurozone countries over the next two months, based on flight seats still left unsold, significant rate reductions by hoteliers and an improvement in the euro-pound exchange rate.
Already, Spanish and Portuguese hoteliers desperate to fill empty rooms are following the lead of Greek hoteliers with discounted rates for late deals.
The improved exchange rate alone has yet to lead to any significant change in demand according to operators and bed banks, even though prices in resorts are falling as a result.
If companies start to feed through a large influx of cheap deals to Spain and Portugal and the pound continues to strengthen (Barclays Capital is predicting it will hit 1.15 euros to the pound in three months’ time and 1.2 in six) it could be a powerful lure for bargain-hungry last-minute holidaymakers.
And then it will be a case of which bed bank, agency or operator can get the best deals out to consumers the fastest. Let battle commence.
Forum discussion
What are you expecting from the lates market? Discuss it in the travelhub forums
With the cost of certain no frills airline tickets over the school holidays already, traditional tour operators could be on a winner. Question is will they hold their nerve or will we see silly pricing?
Nick, Broadland Travel
With the cost of certain no frills airline tickets over the school holidays already, traditional tour operators could be on a winner. Question is will they hold their nerve or will we see silly pricing?