Budget ‘won’t avert careful spending’ Ian Taylor


UK consumers are set to be “more careful with their spending” this year regardless of any tax giveaways in the Budget on Wednesday. KPMG chief economist Yael


Selfin told an Abta Travel Finance Conference in London last week: “We expect some tax cuts in the Budget. But I would be cautious on how much to expect the chancellor to support spending. Debt levels are elevated. There is not much room for the government to spend.” A general election is due by


January, with a November date most likely but May 2 a possibility to coincide with local elections. A senior industry lobbyist at


Westminster told Travel Weekly: “We’ll be studying the Budget for signs of when the election might be.” Selfin warned the outlook for


the next government would be poor, saying: “Policies will be very much restrained by the UK’s debt.” More positively, she noted:


“Job security is relatively high – we don’t expect unemployment to go up too much. We also see wage growth overtaking inflation.” However, Selfin said: “The bad


news is cuts in interest rates would not impact households immediately. Mortgages are fixed for two to five years and at least a third of mortgage holders will have to remortgage at a higher rate, so there is more tightening to come for households.


Agents ‘frustrated’ by rebooking trend as cruise fares fall


Josie Klein


Agents have revealed their frustration at customers rebooking cruises after lines “significantly” drop prices, resulting in “more work and reduced commission”. The Cruise Room director


Robbie O’Grady noted a growing trend since the pandemic of lines reducing fares in promotional campaigns, “undermining” the original price of the cruise. He said he has customers who


regularly check to see if the price of their cruise has come down. If it has, they will cancel and rebook if they feel it is worth losing their deposit.


4 7 MARCH 2024 “We always want to do the best


by our guests and we don’t want them to feel they’ve paid over the odds, but seeing our commission dwindle is frustrating,” said O’Grady. “We do all the extra paperwork


to cancel and rebook the sailing on our system and all the while we watch our commission go down.” O’Grady also reported a


“knock-on effect” of customers sharing the “tip” with their friends, prompting them to rebook cruises at a reduced cost as well. His thoughts were echoed by


Broadland Travel owner Nick Lee, who said price reductions in the cruise sector had become more prevalent,


resulting in agents spending more time rebooking sailings. “I’ve never seen so much price


dropping in the cruise sector,” he said. “A customer recently lost a deposit worth £1,500 because the saving was so great, and I spent nearly five hours sorting it. “Losing commission you have


already made and then getting commission on a lower-value holiday is extremely frustrating.” Travel Counsellors agent and


cruise specialist Emma Otter said lines had “inflated” their prices post-pandemic in a bid to recoup losses, prompting them to drop prices when capacity is not filled.


We see wage


growth overtaking inflation . . . but excess household savings are now depleted


“The other not great news is


we had excess household saving post-pandemic and that is depleted now. People are likely to be more careful with their spending this year.” She also warned of “surprises


on the geopolitical side that we can’t bake into our forecasts”. Chancellor Jeremy Hunt was


reportedly looking at a 1p-2p cut in national insurance or income


tax in the Budget. However, even with any cuts, UK tax revenues are set to remain at their highest since the Second World War and to rise annually up to 2028-29. Hunt was reported to be


considering a rise in Air Passenger Duty, removing tax breaks from holiday lets, a windfall levy on oil and gas producers and taxing wealthy ‘non-domicile’ citizens, as well as cuts in public spending to pay for tax cuts. However, the chancellor’s


options have been constrained by deteriorating economic forecasts, with the head of the Office for Budget Responsibility describing the government’s future


spending plans as “fiction”. i Business, page 46


Big price drops are prompting cruise customers to forgo their initial deposit and rebook


She said some passengers create


and join Facebook groups for specific cruises to get to know other guests in advance, but the conversation often shifts to how much everyone has paid, prompting demand for reduced fares. Otter recounted a recent experience


where she rebooked a client on a sailing after the price dropped by £2,000 but said the customer “still expected the same discretionary discount I gave him from the first booking”, leaving her £200 out of pocket. “It leaves a bad taste in the


mouth,” she said. “He lost his early-booking perks, but for the £2,000 saving it was worth it, so it belittles the early-booking savings.”


travelweekly.co.uk


PICTURE: Shutterstock/maridav


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