Large travel agency groups are not “overly concerned” about the continuing cost-of-living crisis as sales continue to smash targets.
Speaking at Travel Weekly’s Future of Travel Conference 2023, a panel of high street, homeworking and online agents cited an “incredible” year of trading, with sales above 2019 levels.
Travel Counsellors managing director and chief commercial officer Kirsten Hughes said “different pockets of the market” could be affected by the cost-of-living crisis but was confident clients would continue to travel.
“We are fortunate we do a lot of premium and cruise and that market has not really been affected,” she said.
She predicted consumers affected by mortgages, such as young families, would cut spend on other items to afford to go on holiday while others might reduce how much they travel.
“They might go away three times a year instead of four,” she said, but added: “I am not overly concerned.”
Barrhead Travel president Jacqueline Dobson said the company had seen customers switch to “slightly shorter” holiday durations and chose all-inclusive options in response to the cost of living crisis.
She said: “It’s not so much [about] price, it’s more about value. People are looking at what the total price is so they know what to budget for. It will be important we offer value next year and not undersell ourselves as travel agents.
“It [cost-of-living crisis] will affect certain markets but we can change direction quickly to sell what is selling.”
She added cruise sales were “massively up” for the group while all-inclusive was the most popular accommodation type.
Booking.com regional manager Ryan Pearson said a recent company survey showed around three-quarters of customers were concerned about the crisis.
“We do see that people in general are conscious of the cost-of-living crisis…but we definitely see that people are prioritising travel. They will not forgo their holiday,” he said.
Clients were tending to try to save money on accommodation or transport but include a “luxury” element, such as a spa day, on their holiday, he said.
All three groups said sales had exceeded expectations this year.
Travel Counsellors’ UK leisure sales were £550 million for the last 12 months’ trading, 91% up on 2019 and 25% up on last year. Corporate UK sales were £210 million, 52% up on 2019 and 35% up on the previous year.
Hughes said it had been a record year for both leisure and corporate sales. “We have smashed every month and had our biggest-ever year. Sales have come back [since Covid] in a big way and we have been helped by average booking values going up,” she said.
She said consumers were either booking “very late or very early”.
Dobson said the group continued to enjoy “record bookings” every month and had launched an online booking channel in response to demand from customers.
“Online bookings are up over 300% but it’s not detracted from our shops or call centre,” she said.
Booking.com has enjoyed a “really resilient recovery”, said Pearson, who stressed clients were not trading down to lower rated properties despite higher room rates.
He added: “We have had higher than expected room nights and bookings in the second quarter of this year. Although there are higher room rates, there is no real difference in [hotel] star ratings [being booked].
“We are about 25% over 2019 in terms of growth of room night booking, and international business is back to pre pandemic levels for the first time in quarter two.”
A third of Booking.com room nights sold in the second quarter were for ‘non hotel accommodation’ such as self contained apartments or private rooms with kitchens, a trend which started during Covid.