Travel agents report bookings continue to defy the economic gloom despite a further interest rate hike likely this week and more tax rises predicted later this month.
The Bank of England was expected to raise interest rates by 0.75% to 3% at its rate-setting meeting on Thursday (November 3), the largest rise for more than 30 years and the highest rate since the financial crash of 2008, pushing up mortgage rates and the cost of loans.
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That increase will come ahead of a government financial statement, now due on November 17, aimed at plugging a £50 billion hole in the country’s finances and expected to raise taxes as well as cut spending.
‘It’s going to be rough’
An unnamed Treasury official warned this week: “It’s going to be rough. Everybody will need to contribute more in tax. We won’t be able to fill the black hole through spending cuts alone.”
Despite this, agents reported another robust week, with notably strong long-haul, luxury and cruise sales, and families looking to budget by booking all-inclusives in shoulder seasons or as far ahead as 2024.
Jet2 and Jet2holidays boosted the buoyant picture by adding 45,000 seats for October 2023 half-term in response to “sustained demand” to destinations including the Canaries and Turkey to allow families to “get the price locked in” now.
‘Mega sales’
Bailey’s Travel managing director Chris Bailey was among those to report a “mega month of sales”.
“It beggars belief,” he said, but cautioned: “Cashflow is still problematic. Most of the profit is going to pay off [Covid] loans.”
Sam Smith Travel sales and commercial manager Suzanne Cumpston said the pandemic had made travel more precious, particularly for mature clients.
“One customer came into our office and booked three holidays at once. The bubble has certainly not burst yet,” she said.
Luxury and long-haul growth
Cumpston noted “definite growth” in luxury and long-haul sales, adding: “More families are choosing all-inclusive or villas and we have noticed huge growth in cruise, as this is mostly seen as all-inclusive.”
Polka Dot Travel director Mark Johnson also reported “plenty of long-haul” bookings but added: “People are planning further ahead, taking advantage of the great deals, including travelling off season.”
Barrhead Travel said budgeting for 2023 was key for clients. President Jacqueline Dobson said: “Value, low deposits and the option to benefit from monthly payments are front of mind for holidaymakers.”
World Travel Lounge managing director David McDonald said summer 2024 was already selling well, with clients booking further ahead to spread the cost, but stressed: “Our average booking value is still higher than pre-Covid.”
Spires Travel owner Paul Knapper cited “definitely more advance bookings [for] over a year ahead than in previous years”, helped by tour operators offering guaranteed prices and departures for 2024.
‘Throwing caution to the wind’
Tivoli Travel director Jo Richards said bookings were a mix of last-minute, 2023 and 2024. She said: “We’re busy. Most people are throwing caution to the wind.”
Sales volumes for Advantage Travel Partnership last week were similar to the previous week but 61% up on revenue for the same week in 2019.
The consortium’s most popular departure months for 2023 were March and May. “Shoulder months are performing well,” said chief commercial officer Kelly Cookes.
The US, Hong Kong, Thailand, Singapore and the Maldives were top sellers last week, although short-haul took the largest share (67%).
More: Travel could be worst-hit sector between now and end of year, says Deloitte
Cost-of-living crisis still not causing major dent in sales, say agents