Great Rail Journeys has cut capacity during the Diamond Jubilee celebrations and the London Olympics to avoid its business being “hammered”.
Chairman Nick Cust said Amber Travel Group – holding company for brands Great Rail Journeys, Treyn and Rail Select – had avoided putting together tours around the dates of the Diamond Jubilee celebrations in June, usually one of its strongest months, and July and August, when the Olympics will be held.
Celebrations hit demand
“We have been hammered by the Jubilee in that we have not put any tours around those dates because our customers are mainly 60-plus,” said Cust.
“The Olympics has been very difficult for us too, not just because customers are going to be viewing it but because many require pre-tour London accommodation and have not been able to book because prices are sky-high and minimum stays are three nights.”
Long-term growth
Despite this, Cust is upbeat about the escorting touring market and confident of growth in rail tours, particularly with a booming elderly population. He predicts annual growth in volumes of 15%.
“The demographics are in our favour and the age group is growing all the time. Pensioners are reasonably well-protected (from the economy) and they do have time and buy on value,” he said.
Other events this year, such as the Floriade horticultural show, held every 10 years, have also helped boost bookings. Cust anticipates the group will end its financial year with turnover 2% up and customers around 5% up.
Figures for the first half of the group’s 2011-12 financial year, up to March 31, are expected to show revenues up 2% and passengers 3% down on annual passenger carryings of around 10,500. The decline in passenger numbers was because the group reduced the number of its three and four-night winter tours, such as Christmas markets, because of the squeeze on consumer spending.
“The year before we had aggressive aspirations for our winter programme and we had to rein that back halfway through the year. The business is now the right size,” said Cust, who was formerly joint managing director of short-break specialist Superbreak and was awarded an OBE in 2009 for services to tourism.
Trade targets
Cust hopes the group’s price transparency will entice more agent bookings, particularly by those fed up with operators’ direct online discounting tactics.
Average selling prices are £1,700 for Great Rail Journeys and £705 for budget brand Treyn.
“We don’t discount – not many businesses can say that,” added Cust. “Agents moan about under-cutting. They need to direct their firepower to the ones that don’t.”
The group, which began working with agents in 2008, aims to double trade bookings to 15%-20% of turnover by growing sales with the 1,200 independent agents it actively works with. Retail sales so far this year are 24% up.
Despite this summer’s challenges, Cust remains confident. “Last year we grew volumes by 10% and post-Olympics the momentum will return.”