THE trade has been hit by up to 50,000 cancellations on summer 2000 holidays from people who signed ‘buy now pay later’ deals as far back as August.
Customers who have been contacted in February and March to start paying for the holidays have simply cancelled and chosen cheaper alternatives. Many originally signed up for holidays which offered 10% or 15% off but the market has been flat and retailers are now offering 30% or even 40% discounts in May and June.
“The cancellations are a huge issue because companies which thought sales were in the bag suddenly find they were not,” said one source. “It just proves that people don’t attach a value to a holiday unless they pay something for it.
“The marketing campaigns have massively backfired.”
Lunn Poly was first to offer a no payment until February scheme back in August. This was quickly followed by rivals and within weeks Lunn Poly reverted to a ‘no deposit for six weeks’ scheme.
Thomson Travel Group managing director of UK distribution Nigel David said: “As an industry, we have only got ourselves to blame. We need a more sensible policy.”
First Choice MD UK distribution Peter Shanks said:”The problem is that this year we have offered the customer everything with big discounts and nil deposits. I would be in favour of a more sensible deposit of up to £25, which still offers great value.”
St Andrews Travel Centres MDAndrew Dickson, who refuses to offer low or no-deposit deals, said:”It’s wonderful news. Booking a holiday should be a serious business and travel agents that have tried to steal market share with these gimmicks have found it has come back to haunt them.”