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‘Massive discounts’ fuel fears for summer pricing

Fears are rising of a summer price war as the trade reports high levels of premature discounting and unusually competitive offers in the European beach market.

Some agents and operators reported unpredecented discounts, offers and low deposits for the time of year, with one retailer pleading with suppliers to hold their nerve on price as the impact of Brexit uncertainty continued to hit holidaymakers’ choices.

Traditionally, discounting increases in the June lates market as suppliers look to sell off unsold stock at cheaper prices.

Mark Godden, Cruise Circle product development manager, said: “The level of discounting is among the highest I’ve seen. There is a lot of distraction out there and trying to get people to focus back on their holiday is challenging.”

Jeanne Lally, joint managing director of Travel Bureau, agreed, saying: “There is some premature discounting going on and the market is flat at best. Brexit has definitely dampened demand. 2020 is selling well. But for 2019, people are sitting tight. Suppliers need to do what they need to do.”

Rachel Brinkley, Fred Olsen Travel cruise development manager, said discounting had worsened in recent weeks.

She said: “I have noticed massive discounting. This has caused our homeworkers to struggle a bit. Our 13 shops are finding that suppliers have really dropped their pricing. It is more competitive and we’re price matching with OTAs.”

Examples of discounts or unseasonably low offers include up to 40% off Hayes & Jarvis breaks; up to 50% off Saga river cruises; and low deposits, including £49 per person on Travelsphere’s European and worldwide bookings made until April 25. Mercury Holidays has extended its spring sale with savings of £50 on package breaks.

Baldwins Travel joint managing director Nick Marks said: “Our message to suppliers is ‘please don’t panic, and don’t discount’.”

Some in the trade downplayed fears of a price war but said suppliers were throwing in extras.

Simon Morgan, chief executive of Welsh miniple Tailor Made Travel, said: “Overall there are reductions in wholesale prices due to the uncertainty caused by Brexit.”

Karen Allen, manager of Aspen Travel, said: “[Suppliers] are not discounting but a lot are offering Brexit guarantees, low deposits and value‑adds like free pickups.”

Saga Holidays managing director Maria Whiteman said there was more discounting than she had ever seen at this time of year, but stressed operators had no choice.  “Anyone with commitments is heavily discounting because they have to pay for that flight or bed, so we can’t hold our nerve.”

Some agents and operators have reported a high number of discounts, offers and low deposits for this time of year due to a flat market triggered by uncertainty around Brexit.

At a glance

• They range from extended low deposit schemes starting at £49 to three-week holidays for the price of two weeks.

• Some retailers have called on suppliers to “hold their nerve”, but others say incentives are needed to stimulate demand in the sector.

• One supplier said operators had no choice but to discount where they have commitments in place for flights, beds and cruises.

What do you think? Is there an unusually high level of discounting and offers in the market? Email: editorial@travelweekly.co.uk

 

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