By Simon Cooper, chief executive of On the Beach.
January has always been a very important month for our industry. About 25% of summer holiday bookings are expected to be made during the month, and it usually serves as a pretty good barometer for how the rest of the year will go.
For On the Beach, it has been a very positive start to the year with trading well above last year, and the challenge will be to maintain this momentum.
It is always difficult to gauge the state of the background market as the feedback is anecdotal or the figures massaged. Tui recently reported a 11% year-on-year drop in bookings (against a backdrop of 9% less capacity) during January, while it has been reported by the national press that Thomas Cook has suffered a slump of more than three times that of its main rival, with its online business allegedly 45% down on the previous year.
Busy summer of sport
Overall, there have been reports of a 10% decline in sales during the first two weeks of the year, so those that are out-trading the market should be delighted with their start to 2012.
The London Olympics and Euro 2012 football tournament will undoubtedly impact our industry during our busiest period, changing the public’s buying patterns at a critical time.
Abta released a piece of research last week that suggests more than 12% of all Brits – including 22% of the over-65s – want to escape the Olympics and more than 30% of Londoners are considering changing their holiday plans either to avoid or support the Games. While this may create opportunities for many travel businesses, I believe that it’s going to be an incredibly late market with operators discounting unsold seats and beds.
Brits still love to travel
With recent reports suggesting Britain is heading for its first double-dip recession in more than 37 years, it is safe to say that 2012 will be another very difficult year for our industry. However, there is some light at the end of the tunnel.
The pound recently hit a 15-month high against the euro, meaning more holidaymakers will head to the eurozone this year, with destinations such as Tenerife, Majorca and mainland Spain looking increasingly in demand.
Egypt and Greece cannot help but attract more visitors after last year and it is likely that all-inclusive will once again prove popular as a value-for-money choice.
So overall it’s been an encouraging start to trading, but it’s fair to say we are being cautiously optimistic for the remainder of 2012 – there are too many unknowns: the euro, the recession, the football, the Olympics and, of course, the UK weather. But one thing is clear: Brits still love to travel abroad.