Hike in cost of living ‘yet to hit travel’


Ian Taylor and Hanisha Sethi


The rising cost of living is expected to hit consumer confidence but there is little sign of it hampering the rebound in holiday demand. The Consumer Price Index (CPI)


rate of inflation is at a 30-year high, forecast to hit 6% this month and exceed 7% in April and the Bank of England raised interest rates last week. Yet consumer market analyst Mintel insisted travel “will remain a consumer priority”. In analysis provided exclusively


to Travel Weekly, Mintel noted: “Many consumers have been able to top up their savings during the pandemic and travel will be one of the main areas to benefit from


pent-up demand for experiences that have been off limits. “The increased cost of living


will lead those on lower incomes to watch how they spend. [But] consumers on higher incomes, less affected by inflation, are far more likely to take holidays.” Mintel research in December found 85% of households with income of £50,000-plus plan a holiday this year. It also noted the travel sector “holds one big advantage – holidays represent escapism, something never more applicable”. Paul Davies, Mintel category


director for leisure, travel and food service, said: “Luxury experiences will remain a priority consumers will be prepared to pay for.” Tui chief executive Fritz Joussen


Abta lobbies to ‘ensure restrictions don’t come back’


Ian Taylor


Abta is focusing its lobbying efforts on ensuring there is no return of travel restrictions for vaccinated travellers as bookings return at volume. Yet it has revealed fewer than half


of members have accessed Additional Restrictions Grants [ARGs] from local councils in England. Chief executive Mark Tanzer said:


“Our focus with the Treasury is to make sure we don’t have restrictions coming back. We’re working with the Treasury to give evidence of how


4 10 FEBRUARY 2022


quickly restrictions throttle demand. “We’ve made it clear the sector is


in difficulties after two years of not trading. But the focus of our talks with the Treasury now is on making sure restrictions don’t come back.” Speaking on a Travel Weekly


webcast, Tanzer said: “Members have done incredibly to get this far. We hope now to see bookings boost balance sheets. [But] we’re not out of the woods. When you trade, the financial pressures grow. It’s going to be a tense period. Ensuring the government is aware of that and that support mechanisms are there is still a priority.”


He noted the government “made


clear that operators and travel agents are eligible” for ARGs, but revealed “less than 50%” of members had accessed the grants, saying: “It’s a time- consuming process, [and] discretion lies with the local authorities.” Tanzer insisted: “We’ve done


everything to make sure they realise the pressure businesses are under and their eligibility.” He said Abta remains “in contact” with the administrations in Scotland and Northern Ireland “to make them aware”, adding: “I’m hoping travel companies will find it easier to access grants.”


much-improved picture.” i Business, back page


Hear what else Mark Tanzer had to say at: travelweekly.co.uk/media


travelweekly.co.uk


Travel will be one of the main areas to benefit from demand for experiences that have been off limits


acknowledged “inflation is an issue” as he reported the group’s latest quarterly results on Tuesday. But he insisted: “Savings are


strong. We don’t see a pattern of buying cheaper.” Joussen pointed out: “Fuel


prices are high. Fortunately, we hedged everything we sell for the season. The pound is strong at €0.83 or €0.84, so we have a counter- effect. Holidays to Turkey should


be very attractive because of the devaluation of the Turkish lira. It should not be a problem.” Agents offered a more mixed


view. Perfect Getaways director David Palmer said: “We’re not massively worried about the cost of living. We’re relying on pent-up demand for holidays. Customers haven’t been away and they have cash they want to use.” However, a spokesperson for The


Travel Network Group said: “The rise in cost of living will be worrying for many [and] have an impact on available income. “It might be the difference


between going on holiday or not, or make customers reconsider the


destination and spend.” i Business, page 47


Mark Tanzer


An Abta member survey in


December painted a grim picture, with businesses reporting turnover at just 22% of pre-pandemic levels. Abta urged members to take part in a new survey last week “to support this lobbying activity”. Tanzer said: “I hope it will be a


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