The chief executive of Jet2.com and Jet2holidays has slammed the Bank of England’s decision to raise interest rates, saying the travel industry is in for a “rough ride” over the next 12 months.
Steve Heapy slated the Bank of England which earlier this month raised interest rates by 0.75% to 3%, the largest hike in 33 years, and said the UK is facing its worst recession since records began, predicted to last until 2024.
He warned the impact of increased interest rates will leave people with less disposable income to spend on holidays.
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“I don’t agree with the action the Bank of England is taking, I think it’s the wrong thing putting interest rates up as it will push the country into a recession,” he said at Jet2holidays’ annual conference.
“I can see interest rates being pushed up even further which means people will have to pay more on their mortgages and will spend less elsewhere.
“I think things will get tougher. Fuel bills going up will put a real squeeze on incomes and prices will continue to rise.
“We are in for a rough ride.”
Heapy then warned inflation will push holiday prices up as supply chain costs increase.
“We are sellers of the end of the holiday product and there are lots of people in the supply chain until it reaches us.
“Costs are going up all the way through the chain plus some people are being greedy and putting costs up more than they should, so we are seeing our agent partners who are selling the end product having to sell something that has gone up a lot in price.”
Heapy went on to tell agents the industry does still have “a lot to be positive about” as customers will sacrifice other luxuries before they abandon their holiday plans.
“People in the UK want to get away and they will give up other things before their holidays.
“You’ve got to justify your margins as prices are increasing so you must give great customer service, be there to give them advice and provide them with all the information they need to justify the money you are asking for.
“There’s a lot to be positive about, we’ve got a great industry and people want to go on holiday.”