WTM 2018: GfK warns of discounting during January peaks

Industry analyst GfK is predicting only a “slight increase” in booking levels if the UK secures a deal on Brexit and warns tour operators may need to discount in the critical January peak sales period.

Speaking at a Forward Keys seminar at the opening of World Travel Market, business group director David Hope claimed a “huge bookings bounce” in holiday bookings as a result of clarity on Brexit remained unlikely.

According to GfK, UK bookings overall for 2019 are 11% up year on year, but have dipped slightly in recent months. Bookings in September for next year were 2% down and in October they slipped 1%, showing nervousness among consumers in the UK economy as Brexit approaches.

Hope said: “If there is a deal, that will start to give consumers some clarity but I don’t think there be a huge bounce in bookings. I think there will be a slight increase; there are too many other factors at play like job security and exchange rates. I would say people are still slightly nervous and slowing down their plans.

“As we approach the key booking phase I think it’s critical we have clarity and if we don’t then tour operators will be using incentives to address that and drive bookings because it is so important for the industry.”

Already bookings of all inclusive holidays are up, according to GfK, as holidaymakers look at ways to budget for 2019 and avoid increased costs as a result of exchange rate fluctuations, and consumers are booking slightly shorter durations, such as 10 night breaks instead of 14, said Hope.

Destinations with more preferential exchange rates such as Turkey and Tunisia are seeing strong growth, said Hope, as well as the US, which has seen bookings recover to “back to where they were 18 months ago”. Turkey is not yet back up to the levels of holiday bookings that it enjoyed in 2016.

He added: “In 2018 we saw growth to north Africa, Bulgaria and Turkey and that will continue in 2019 and we have already talked about the US coming back strongly.”

The Travel Weekly team is reporting extensively from this year’s World Travel Market, stay up to date on our live blog and  event microsite