Overcapacity by no-frills carriers means rock-bottom flight prices are a feature in a lates market hit by low consumer confidence and high accommodation costs.
“The market is generally slower than the industry would like,” said Chris Photi of White Hart Associates Travel Accountants. “Online travel agencies are not doing too badly because flights are so cheap – there is too much low-cost capacity; we are seeing £80 return [fares] to Majorca.”
The industry had a buoyant start to 2017, with a large amount of packaged capacity sold early. However, economic uncertainty following the election along with currency issues are thought to have dampened discretionary spend.
“Exchange rates are a huge issue; the perception is that it is 20% dearer [in the eurozone],” said Photi.
“There is not the feel-good factor to spend – maybe people are waiting for the late, late market.”
Alan Bowen, legal advisor to the Association of Atol Companies, added: “Talking to agents, they are saying that the short-haul lates market has not happened yet. It’s got to happen soon or there will be a lot of empty seats. People are still uncertain, they are not spending large sums.”
Sunvil chairman Noel Josephides admitted there was “obviously” still a lot more capacity to sell from budget carriers. “There’s a limit as to what can be sold,” he warned. However he added that bookings at the start of the year had proved so strong it was natural the market would slow.
“People were talking about 14% and 15% increases [at the start of 2017 compared with 2016]… I think things have now reverted to normal with increases [now] of 3% or 4% [year-on-year].”
Josephides said strong German, Dutch and Russian markets meant that while the flights were readily available, accommodation was proving hard to source.
Elite Travel Group chief executive Neil Basnett agreed the market had tailed off following the strong start.
“The early bookings flooded in but since May it has been more patchy… Even long-haul in May, June and July has been slow. It could have been driven by [prime minister Theresa] May’s decision to hold a completely unnecessary snap election; elections always cause a slowdown.”
In contrast, Southall Travel sales director Jaymin Borkhatria described long-haul sales as “buoyant”.
Borkhatria admitted the election had depressed the market, but added it had rebounded strongly. “When compared to short-haul, it’s excellent value for money.”
Thailand, he said, was up 19%, with seven nights’ full-board in Phuket from £590 including flights.
