The renaissance of the package holiday is genuine but does not mark a return to the 1980s style of tour operating, the Hays Independence Group conference was told.
Hays Travel says the resurgence of the package has been driven by customers seeking reassurance during the recession that their money is safe and has been spent wisely.
And although there are doubts that official industry data supplied by GfK represents the whole market, Hays Travel says it has indicated a trend which its members are benefiting from.
Giving an overview of trading and the market at this week’s annual consortium conference in Birmingham on Wednesday, Hays said the upturn has come quicker than he expected.
Hays famously predicted a bath tub-shaped recovery when the downturn was at its height and warned there could be a lost decade.
However, he told delegates this week: “I think I got that wrong by about three years. It’s going to be seven years rather than ten.
“We are approaching the uptick and there are better times coming. I’m genuinely optimistic.
“It’s early days and the economy is still fragile and there are lots of things that could blow us off course.
“But all things being equal I’m generally optimistic, which is a message I have been delivering for 18 months now.”
Hays quoted industry data which has pointed to a revival of packages over the last few years and said the group was seeing consumers ask for the reassurance of Atol cover.
But he said the modern Atol protected package was not necessarily the old-fashioned committed aircraft seats put together with committed bed stock and put in a brochure.
“We are seeing a resurgence in the opportunity of the old-fashioned package holiday,” he said.
Referring to the reaction to previous “provocative” comments he made about the demise of dynamic packaging, Hays added: “I do not think dynamic packaging is really doomed – some people in the trade press responded saying that was rubbish and the package holiday continues its inevitable decline.
“But the most recent Abta travel trends report was reporting that in 2013 the percentage of holidays booked that were packages if you look at foreign holidays was 46%
“In 2010 that number was 37%, so there is definitely a resurgence in the package holiday. We see customers asking about financial protection and security.
“Money has been very tight throughout the recession and customers are increasingly concerned that their money is being well spent and it’s safe.”
Hays singled out IG member Imagine Cruising as epitomising the new style of package provider putting together tailor-made trips dynamically but selling them as Atol packages.
“What we are seeing is not the old 1980s commitment to aircraft seats and hotel rooms and producing a brochure and this old-fashioned model, it’s much more sophisticated than that.
“There are many people in this room benefiting from this trend, both as tour operators and as agents.”
Asked about whether official industry figures were robust enough to give a comprehensive view of the market, Hays said: “Certainly we are a contributor to the sampling, we provide monthly information.
“Those are industry-wide market research figures and all we can do is quote the best available industry statistics.”
As a result of this changing nature of the market Hays said it is seeing higher margins and satisfaction scores.
The group is also seeing its own in-house operator Hays Faraway and bed bank Hays Beds take an increasing share of the group’s business.
Andrea Kendal, Hays group commercial director, said: “We are seeing a migration from the suppliers who are paying poor commission levels or where we are in significant price match situations and our profits are hit significantly from having to match those.
“For IG members acting under the full Atol we can see, where they are putting together special bespoke packages, higher margins, and certainly we are seeing the power of the organisation in negotiating commercial terms for the group.”
The addition of the Bath Travel agency business last year has added £100 million of commercial clout to the Hays group and this is having an impact in terms of commercial terms.