Latest booking figures show little sign of a pick-up in the summer market. Ian Taylor reports.
Bookings for this summer
remain down on last year following a 7% year-on-year fall in sales in June, a third consecutive month of decline, according to analyst GfK.
The shortfall against June 2013 came after a 3% fall in bookings year on year in May and an 11% fall in April.
The three-month decline followed a flat March, leading GfK to report season-to-date bookings to the end of June down 2% on 2013 and total revenue down 1%.
GfK business group director David Hope said: “It is unlikely the market will be positive at the end of the season.”
The slide in sales followed a strong start to the year but confirmed reports of softening demand for holidays, despite improving consumer confidence in the economy as a whole.
The First Rate Holiday Confidence Index, published this month, showed a fall on April (Travel Weekly, July 17).
However, latest figures from the Office for National Statistics showed a 4% increase in overseas holiday departures year on year in the three months to May. This followed a 4% rise in annual departures last year over 2012.
GfK attributed the June decline to a combination of the World Cup, good weather at home, lower footfall on the high street and “most important, lower availability due to better demand management”.
Strong sales early in the season almost certainly account for some of the bookings decline since, and some companies have cut capacity. Thomas Cook reported a 1% reduction in UK capacity this summer, in line with a 1% fall in bookings to early May.
However, other companies have added capacity. EasyJet reported a 16% increase in seats from Gatwick this summer and financial analyst HSBC reported an overall rise in short-haul seat capacity of 6% for the season.
The GfK figures account for a significant proportion of the market and there will be winners as well as losers, with volume of less concern to some companies than others. Tui Travel reported a 3% decline in summer bookings to May 4 but a 5% increase in average sales price.
Package holiday bookings remained ahead of the market in June and short-break bookings were up year on year.
At the same time, not everyone is solely focused on late bookings, with two other seasons on sale.
GfK reported bookings for winter 2014-15 close to flat on a year ago after a poor June but a strong May, but with revenue down 4%. The analyst suggested passengers were “trading down to a shorter or cheaper holiday”. However, it reported family bookings up 5% and short-haul bookings up 16%.
Hope said: “It’s difficult to call this season. Many operators have erred on the side of caution and cut some capacity.”
All-inclusive bookings continue to show growth – up 4% year on year for next winter – with package sales up 2% on the same stage a year ago. GfK reported the largest growth in holidays priced between £1,399 and £1,599.
Early bookings for summer 2015 also appear strong, with sales and revenue up almost 20% on a year ago.
Thomas Cook has released a trading update and results for the nine months to June today (Thursday).