p14 news Oct9 7/10/09 21:24 Page 14
news visit usa
ttglive.com
The Visit USA Association held its latest general meeting in
ECONOMY.
London, where the economy, the Co-op’s current trading and
BA’s new seats fee were discussed. Robin Searle reports
Expert predicts
Co-op says ‘indie
slow recovery
TRAVEL companies can expect to see signs of
economic recovery over the coming year, but tax
agents selling up’
rises in 2010 could put the brakes on consumer
spending.
John Walker, chairman of Oxford Economics,
predicted a slow recovery in 2010, which would
THE HEAD of the Co-operative if your business is 20% down, start to gather pace in 2011.
Travel’s retail division is receiv- you can’t carry the same cost But he told the Visit USA meeting that the
ing “five or six letters a week” base as you can when you’re depth of recession meant travel companies
from independent agents hoping 10% up,” he said. should not expect a quick return to previous
to sell their businesses. Davis said he hoped the fall in performance levels, and warned likely cuts in
But many have left it too late sales had levelled off, and a slow public spending and hikes in taxes next year
to take action and would strug- recovery would now begin. could discourage spending on travel.
gle in the tough sales climate of But he predicted a challenging Walker said there was a “reasonable backdrop
the rest of the year, he added. end to the year and flat peak to start being more positive” but warned that
Retail distribution director sales period. optimism needed to be grounded in reality.
Trevor Davis (pictured) said the Co-op He also listed a series of factors, “The overhang of this recession is going to last
had outperformed the market including VAT rises, Air Passenger a long time,” said Walker. “You will see strong
this summer, with customer Duty increases, the general elec- recoveries in some sectors but if something goes
numbers down 9% against an tion and the World Cup, that down 50% and then recovers 50%, you’re still
average of 11%. would present more challenges 25% down on where you started.”
He said one of the Co-op’s to the travel industry in 2010. Walker predicted factors such as an aggressive
biggest concerns was a rise “There is evidence that some monetary policy response and lower levels of
in unemployment, acknowledging confidence is coming back and we fixed rate borrowing meant recovery in the UK
that staff and shop cuts made by his are seeing some evidence of people would outpace the eurozone, but was likely to be
own company contributed to the problem. saying ‘we’ve gone without this year, we slower than in the US.
But he said pressures on high street shops won’t next year’,” he said.
meant that cuts had been unavoidable. “But there’s no doubt October to December is
“We are losing an awful lot of experience, but going to be a tough time for independent agents.”
FORECASTS.
US: good value
BRITISH AIRWAYS.
Seat fees may ‘bite BA’s bum’
versus visa fees
FAVOURABLE exchange rates and pricing could
BRITISH Airways has admitted its decision to its reliance and exposure on key routes, and make the US a more attractive option than the
charge passengers for securing preferred seats hoped to receive clearance in the “next month eurozone next year, according to experts.
in advance of a flight could “bite it on the bum”. or so” for anti-trust immunity that would On Holiday Group chief executive Steve
But Simon Brooks, the airline’s head of con- enable it to pursue a joint business agreement Endacott said the combination of favourable fuel
sumer sales, talking at the Visit USA event, said with American Airlines and Iberia. hedging prices and little movement in exchange
BA would “die as a business” if it failed to act. Brooks pointed to the launch of a daily rates would result in cheaper holidays to the US
Brooks said the flag-carrier had clawed back Las Vegas service in October compared with the eurozone.
losses from £3 million a day to £1 million, but and the new all-business- But he said that the challenge was persuading
said it could not continue to operate with record class service to New York as customers to spend the disposable income
load factors but low yields. evidence of BA’s commitment produced by lower interest rates.
“We have had to make strong and occasionally to growth and the US market “If you’ve got a job and you’ve got money,
unpalatable decisions,” he said. “Some we’ll get in particular. there’s no logical reason why you wouldn’t go on
right but, to be candid, some we’ll get wrong and He said senior managers holiday next year,” he said.
we may get bitten on the bum. were doing their bit towards Trevor Davis, the Co-operative Travel’s retail
“The seating policy may not be the right thing BA’s recovery. “None of us distribution director, agreed US holidays would
to do but we need to do something.” are getting pay rises,” he be good value next year, but warned that
Brooks said BA was focusing on managing said. “In fact, I’ve had a pay proposed charges for the Esta visa waiver
its destination mix and frequencies to reduce cut, if the truth be known.” programme could severely dent UK-US travel.
14 09.10.2009
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