TUI Travel chief executive Peter Long described the wait for bookings this summer as “scary” and warned the industry faces a long-haul to economic recovery.
Speaking at The Travel Convention in Barcelona, Long said: “We are living with uncertainty about the level of unemployment, and the huge rise in the government deficit. Unemployment in the UK has not peaked at all.
“The pain will be ongoing, and we are taking a conservative view going forward. We see some green shoots, but we have seen GDP reduce significantly in the eurozone and the UK.”
He warned: “We will see the oil price rise again when the world economy starts to grow, and we will see the weakness in sterling. That puts huge cost pressures on the business that we have not had in the past. Cost inflation is a huge issue for us.”
Long said there is still a strong desire among customers to take a main summer holiday. But he added: “Bookings are much closer to departure. This industry has always been a roller coaster ride, but it was a more scary ride this summer.
“Thank God there has been consolidation. I dread to think what business would be like if we had not taken out costs.”
Long forecast “a long haul” to recovery and said: “We have an open mind about next summer. The big caveat is unemployment, or the fear of unemployment. On the plus side, lots of people who stayed at home this summer have gone into our shops and booked holidays for next summer.”
He described suggestions of a long-term boom in domestic holidays as “nonsense”, saying: “We will get back to a more normal world.
“Our focus is on cost and capacity in the short term. But we are looking at growth in 2011 or 2012.”
Long hit out at the banks following the near collapse of the financial system a year ago, calling it a “huge irony” that: “These investment bankers were telling us how to run our businesses, [when] they were wrong in the way they were running their businesses.”
- More coverage from the Travel Convention at travelweekly.co.uk/abta2009