NEWS
Observers warn travel faces ‘strong economic headwinds’ for the next year yet demand ‘may have been intensified by the pandemic’
Industry leaders optimistic despite warning of ‘prolonged downturn’
Travel Weekly reporters Marrakech, Morocco
Travel firms have been warned it would be “irresponsible” not to anticipate a downturn amid a prediction of a “difficult two years” – but were also told the sector remains “well-placed” to prosper. Former Der Touristik UK
chief executive Derek Jones said it was “inconceivable” to think demand would not be suppressed by the economic downturn and war in Ukraine and warned of “a storm ahead”. Speaking at a Travel Weekly
Ben Bouldin, vice-president
EMEA for Royal Caribbean, said the family market in particular was likely to be impacted by increased living costs, while Barrhead Travel president Jacqueline Dobson said the rising cost of airfares was a concern. However, she added she remained
STORY TOP
“cautiously optimistic” for 2023, while Jones agreed that the industry’s resilience in the face of the Covid crisis should give confidence to “companies that have
handled customers well”. Abta chief executive Mark
Business Breakfast at Abta’s Travel Convention in Marrakech, Jones said reports of strong sales belied “a difference between revenue and yield performance” and added: “It would be irresponsible to not be ready for a downturn in travel. I think it’s going to be a very difficult year; in fact, a difficult two years.”
travelweekly.co.uk
Tanzer told the convention: “The demand for travel has not been dimmed by the pandemic – in fact, it may have been intensified. “I see us having to battle strong
economic headwinds for the next year. But we shouldn’t be daunted.” Eleanor Scott, leisure strategy
director at financial services giant PwC, predicted a “shallow” yet
“prolonged” economic downturn in the UK, with high inflation rates predicted to reach a lower peak than previously expected due to the energy price cap. But she said the positive impact of
tax cuts on consumer demand could be offset by rising costs and interest rates, in addition to foreign exchange pressures which would make “inflation stick around longer”. Despite the warning, Rick Jones,
PwC partner and head of travel and leisure, argued “things can bounce back very quickly” and added: “Travel is well-placed to benefit from long-term trends driving consumer spending.” Richard Singer, chief executive
of Ice Travel Group, which owns
icelolly.com and TravelSupermarket, noted an increase in searches for May 2023 holidays as consumers looked to tackle rising living costs and searched for better value. He insisted those consumers
who retain disposable income would
still spend on travel, but they were checking a wider range of search filters and different durations and destinations in a bid to save money. Echoing comments made at
the recent Travel Weekly Future of Travel Conference, easyJet holidays chief executive Garry Wilson said customers would seek out value options despite “inevitable” price rises, while Hays Travel owner Dame Irene Hays said other purchases would be sacrificed before holidays. These views were echoed in
Abta’s Holiday Habits report, which found 61% of 2,000 consumers surveyed were planning an overseas holiday in the next 12 months and were more likely to cut non-essential spending on eating out and leisure activities than travel. The report also showed overseas
travel had reached 70% of 2019 levels in the past year despite restrictions not being eased until March, with demand for travel professionals rising.
13 OCTOBER 2022 5
PICTURE: Shutterstock/Nieuwland Photography
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