Agents and operators are yet to see a significant impact on bookings from the cost of living crisis but remain concerned that increased taxation and inflation could create a “perfect storm” for future trading.
Jet2.com and Jet2holidays chief executive Steve Heapy warned last weekend of higher prices in 2023 as hotel contracts and hedged fuel prices expired.
Meanwhile, Lee Haslett, vice-president global sales for Virgin Atlantic said the rising cost of fuel represented an industrywide challenge.
More: Hike in cost of living ‘yet to hit demand for travel’
Most over-50s plan holidays but cost of living rises creating caution
“It will have an impact on not only us but all of our competitors. It will have an impact through the value chain and that will in turn be passed on to ticket prices and fuel surcharges, and that will be a challenge,” he told a Travel Weekly Business Breakfast.
Giles Hawke, chief executive of Cosmos, Globus and Avalon Waterways, insisted older customers, living on pensions or investments, would be “better insulated” from the increased cost of living but admitted: “Everyone will be affected to a level.“
He was hopeful holidaymakers would cut back on other spend to ensure they still took a holiday, adding: “People want to do those things they’ve been dreaming about.”
So far travel firms have not reported a major impact on bookings despite increased pressure on customers’ incomes.
Advantage Travel Partnership said bookings continued to increase week on week and against 2019 sales levels.
Leisure director Kelly Cookes said: “We’re recommending agents make the most of this and capitalise on any spend by increasing marketing to capture this while they can as there will undoubtedly be difficult times ahead.”
She said the glut of good deals, guaranteed fares and discounts currently available would entice clients to commit to booking now.
Hays Travel Independence Group said sales through its 110 members had got off to a “healthy” start in March with customers still “booking big holidays” and trading exceeding 2019.
Paul Knapper, manager of IG member Spires Travel, said: “We’re as busy as ever.”
Hays Travel chief operating officer Jonathon Woodall-Johnston said average sales prices were up for family holidays while the company’s direct debit scheme, which allows monthly payments until six weeks before departure, was helping the agency to retain bookings. He said: “Cancellations are less because people are committed.”
Similarly, homeworking firm Not Just Travel reported a “big shift” towards direct-debit payments. “I only see that increasing,” said co-founder Steve Witt.
Iglu senior vice president of global supply Simone Clark said the company had been “much busier” in recent months but admitted: “We have seen bookings affected. It’s hard to know if it’s Ukraine or the economic crisis. We’ll be focusing on where demand is.”
More: Hike in cost of living ‘yet to hit demand for travel’
Most over-50s plan holidays but cost of living rises creating caution