Travel agents are reporting growing evidence of a divide between clients who can afford to book holidays and those who cannot.
Agents said the mixed picture of sales depended on their customer type, with families appearing to be holding off booking key summer 2023 months.
The feedback from agents comes as pressure increases on household incomes following this week’s government U-turn on tax cuts and removal of energy price cap from next April.
More: Holidays remain priority despite cost-of-living concerns
‘Crippling’ cost of living crisis major barrier to global long-haul travel
Value for money ski holidays ‘of utmost importance’ amid cost of living crunch
Independent Travel Experts managing director Gary Gillespie said the cost of living crisis did not appear to be having a “major impact” yet but cautioned: “I’m sure it’s causing some customers to pause for thought before committing [to booking].”
Homeworkers feeling strain
He reported homeworkers focused on the family market were feeling the strain more than others.
“Those specialising in long-haul are definitely having a better month than those who cater for the more traditional short-haul family market for sure,” he said. “October 2019 was still very busy with Thomas Cook rebookings so it’s difficult to give a true comparison but feedback seems to be mixed, depending on what market the homeworker trades in.”
The share of ITE’s bookings for next summer has risen to 40% of all sales this month, with 32% travelling in school holiday dates. The company is encouraging agents to offer shorter durations or different dates to close a sale.
Advantage Travel Partnership chief commercial officer Kelly Cookes said it was difficult to assess the impact of the current political situation on trading.
She said: “42% of bookings made last week are to depart in 12 weeks so people are still keen to get away and half term sales have been strong.”
However, the top-booked months for 2023 are January, March, May and June, rather than the key summer months, a sign families have yet to commit, she said.
But she added: “It has been a late market all year so this is perhaps to be expected.”
Sutton Travel managing director Andy Tomlinson said sales had been more buoyant over the last seven days for his agency, particularly for long-haul bookings for 2023.
Market ‘unpredictable’
But he stressed the market was “so unpredictable at the moment” and put the upturn in sales down to the agency’s customer base.
“We are in a more fortunate position as we are in an affluent area. A lot of clients are mortgage-free or coming to the end of their mortgages,” he said, adding: “Certainly for the long-haul family bookings we have got over the line in the last week they have debating if they can afford it. The decision-making has been a little slower.”
Inspired Travel managing director Kate Harris predicted a sector of the market would pull out of booking a holiday due to the current crisis.
She said: “The bookings that we are doing are from people who are not going to be affected by this.
“There is definitely business out there but people who in the past would have scrimped and saved all year to have a holiday are the people we are going to lose. The cost of living crisis coupled with how much holidays have gone up will have a significant impact.”
Haslemere Travel managing director Gemma Antrobus said agents had to focus on clients who were in a position to book and had realised the importance of booking ahead to lock in better prices.
“You have got to do your best with those clients who do need your help,” she said, but admitted: “People are asking questions about ‘how do I get the best value’. All we can keep doing is telling people to book as early as possible.”
Cancellations up
Hays Travel North West managing director Don Bircham said cancellation levels were “about 10%” higher than October 2019 levels, suggesting some customers were changing their plans due to the current uncertainty.
He said: “We saw an upturn in cancellations last week with some big bookings cancelled. I think it’s due to a combination of things.
“There is uncertainty in the world. Sometimes it doesn’t need to impact the individual, it’s that subliminal feeling of uncertainty, so rather than writing a big cheque [for a holiday] they back off.”
He added low deposits mean clients could cancel without losing much money which was “something for the industry to think about”.
Deben Travel managing director Lee Hunt was “very comfortable” with forward bookings, adding that long-haul bookings were offering greater value to clients.
He said: “We sold a holiday to Thailand to a family of three who came in looking for Greece – it was a few hundred pounds difference. The internet would not have suggested that so that’s another good reason to use a travel agent. “
More: Holidays remain priority despite cost-of-living concerns
‘Crippling’ cost of living crisis major barrier to global long-haul travel
Value for money ski holidays ‘of utmost importance’ amid cost of living crunch