Market overview Confidence returns but incomes lag
Mantegazza family in a £75-million deal. The Mantegazzas had run Monarch for 47 years but chose not to remain in control to inject fresh capital into a group which weathered the recession of 2008-09. Monarch carried more than six million passengers in 2013 and appeared to be trading well, only to be caught out by a leap in air capacity this year. EasyJet alone added 16% capacity at Gatwick. Monarch required new funding, not least to replace an ageing fleet. The Greybull takeover ensured its survival in a reduced form, with no more charter or long-haul flying – though doubts as to whether it can succeed as a low-cost, short-haul operation may persist. Ryanair made a decisive shift of its own,
ANNUAL HOLIDAY: ESSENTIAL OR LUXURY? Overseas holiday ‘essential’
ESSENTIAL OR LUXURY ANNUAL HOLIDAY:
More than one trip 7% At least one trip 11%
Overseas holiday
‘a luxury’ 18%
Holidays a ‘luxury’ (overseas or UK) 18%
Don’t go
on holiday 14%
At least one trip 11% More than one trip 6%
Source: TNS Base: 1,985 UK adults
A holiday ‘essential’ (overseas or UK) 25%
Don’t know 7%
Overseas holiday ‘essential’ 18%
%
10 15 20 25 30
-10 -5 0 5
22% 18% 7 1 -4 -10 All 16-24 25-34 35-44 3 -1 2 19% 19% 13
making fares available to agents through two of the three major GDS companies and developing a corporate travel product in a direct appeal to business travellers. Then in November the carrier also announced a deal with
Booking.com to create a formidable dynamic-packaging duo.
Harriet Green’s upbeat tone gave way to a warning of tough trading at Thomas Cook
EasyJet stole a march on Ryanair in
courting corporate travel under chief executive Carolyn McCall. It also went a step further in the leisure sector, signing a deal with Tui Travel’s Hotelopia – a subsidiary of accommodation provider Hotelbeds – and announcing plans to offer package holidays, with UK bookings protected under the Air Travel Organiser’s Licencing (Atol) scheme. This ran counter to conventional thinking on industry trends. But in the words of easyJet Holidays general manager Mandy Round: “Consumers understand you often get a better deal with a package.” Anyone who doubts the resurgence of
the package holiday should note that the proportion of overseas air holidays from the UK protected by Atol in the 12 months to March 2014 reached 71%. Over at the major travel groups, Tui
Travel continued its serene progress. The group’s ‘unique product’ strategy – meaning desirable properties made available only through its brands in the UK – stood it apart from the budget airlines and was a major factor in the package resurgence. Tui was due to complete a merger with major shareholder Tui AG of Germany in December 2014, a move previously ruled out by chief executive Peter Long but not likely to affect trading. The situation at Thomas Cook remains
rather different despite undoubted progress since the group courted failure in late 2011 with a near £1-billion debt burden and a share price in the realm of junk status. The turnaround under chief executive
19% 19% 15% 10 5 5 0 2 2 21% 18 16 23% 18% 18% 12 14% Source: TNS (October 2014) Base: 1,985 UK adults
Harriet Green showed an operating profit off the back of £900 million in cost cutting and a sharp reduction in debt. But Green’s unexpected departure on the day of the annual results announcement in November raised doubts about the extent of the transformation. Green’s remorselessly upbeat tone gave way to warnings of “tough trading” and “modest” growth.
-1 45-54 55-64 65+ AB C1 -2 C2DE 18 | Travel Weekly Insight Annual Report 2014 1 -2 Child C 0 3
VIEW OF HOLIDAYS AS ‘ESSENTIA Net % point support for holidays
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