Fears are growing that the soaring cost of living in the UK will depress the travel market, forcing suppliers to cut back on their peaks marketing plans.
Increasingly gloomy news about market turmoil, rising mortgage payments for homeowners and a weak pound have made the trade less optimistic about sales during the coming winter period, delegates heard at Abta’s Travel Convention.
Ben Bouldin, EMEA vice-president at Royal Caribbean International, said his cruise line had seen “a really good 2022”, adding: “We felt optimistic through July and August about the coming months, but that has not really played out.”
He was not sure if the cruise line would spend as much on marketing in the peak ‘wave’ period as normal because consumers may be concerned about buying holidays when their budgets are squeezed.
However, he did add: “Vacations are usually the last thing to drop off the list of things people will buy.”
Commenting on the wider peaks period coming up in late December-early January, he said: “We will see more digital spend and not so many brands with TV ads on Boxing Day.
“I hope I am wrong; I hope brands do have confidence as it has a halo effect.”
He did not think the company would have to introduce surcharges to cover rising costs because its average selling price has grown in 2022.
But he warned: “There will be a chase to bottom if a brand gets nervous about filling capacity; then you may see surcharges. The challenge is to hold our nerve.”
Despite the concerns, he said the cruise line will still promote the same messages: “We offer an escape, with fun, adrenaline-fuelled family holidays…it is a chance to escape, we’re selling dreams.”
Fellow panellist Chris Wright, Sunvil Group managing director, said his company’s peaks will be “a lot flatter” with a reduced marketing spend compared to the same period in 2019.
“If we see demand, we can throw more at it,” he added.
Giles Hawke, chief executive at Cosmos Tours, said his firm’s peaks marketing campaign will “dial up” features such as “inclusions, value, security, safety and being looked after”.
“Price is important but not a key driver for customers; they want to make sure when they book what is included,” he said.
“We are seeing North America as one of our biggest destinations for next year…people want to see places they have dreamt about.
“For the last couple of years, people talked about it, ‘I want to get out’,”
He also said it is important to focus on selling at the right price, admitting that sister brand Avalon had been selling river cruises “way too cheap” because American customers had not been travelling to Europe much in 2022.
Prices had been about £1,800 per person this year but could be £4,000-plus per person next year.
“Americans will be coming to Europe [next year] because the dollar is strong,” he said.
Photo credit: Arif Gardner