The impact on the January peak period is hard to assess. Ian Taylor reports
Clarity on Brexit and what will happen post-March 29 when Britain is due to leave the EU remains elusive, but so does the extent of any impact this uncertainty is having on UK outbound bookings.
The UK trade went into the New Year peak-booking period off the back of strong early sales for summer 2019 and a decent performance for the current winter.
Analyst GfK reported summer 2019 bookings to the end of December up 9% year on year despite a 3% decline in the month of December – thanks to a Sunday Times front page on December 16 which warned: “Don’t go on holiday after March 29”. Bookings fell close to 20% year on year in the following two weeks, heightening fears about the months ahead.
Yet overall trading at the end of December remained remarkably close to the market situation in Germany, Europe’s other major outbound market.
GfK German data showed bookings for summer 2019 down 1% year on year in December following a 2% drop in November. Combined, the monthly falls in Germany were in line with the December shortfall in UK summer 2019 bookings.
Similarly, German bookings for the current winter were up 4% year on year in December and season-to-date bookings up 6%. UK winter 2018-19 bookings rose 5% year on year in December and were also up 6% season to date.
So market sentiment in Germany appeared to mirror that in the UK at the start of this year despite the added complications of Brexit in Britain.
GfK noted booking comparisons for January and February in Germany will be challenged by the strong growth seen in early 2018. The same is true of the UK where January last year saw a 7% increase in summer bookings.
Office for National Statistics (ONS) data released last week confirmed total UK outbound holiday numbers rose 1% last summer on 2017 to new record totals of 17 million during July to September and 50 million in the 12 months to September. The ONS figures include independent holidaymakers as well as those booked through the trade.
The first full week of trading this year saw summer bookings fall 3% year on year, but season-to-date summer 2019 bookings remained 5% up – in line with last year – and bookings for the current winter were up 2% in the week.
GfK noted the season-to-date position in the UK remains “strong” but “can be easily eroded”. Following the December decline in summer bookings, GfK warned: “This drop is due to concerns over summer 2019. We hope consumer fears can be calmed. If not, we’ll see summer 2019 struggle.”
David Hope, GfK senior client insight director, also noted family bookings for this winter up 11% year on year in December while family bookings for summer were down and said: “We wonder if some families have swapped a summer holiday for winter due to Brexit fears.”
Yet GfK also noted “a strong performance by [high street] shops given the challenging backdrop” in converting winter 2018-19 bookings.