BUSINESS NEWS the economy, cashflow, payments and pricing at London forum. Ian Taylor reports


Outbound sector is ‘area of strength’ in ‘bleak economy’


Outbound travel has defied the UK economic slowdown and is “an area of strength in a bleak outlook”, the head of the Centre for Economics and Business Research (CEBR) told Abta’s Travel Finance Conference. Nina Skero, CEBR chief


executive, noted: “We’ve seen very low rates of growth in the UK and the inflation outlook is such that the Bank of England is not likely to cut rates as much as we thought a few months ago.” But she said travel businesses


“will contribute positively to growth – the sector is an area of strength”. Skero argued: “The labour


market is coming under some pressure now, but until people see


Nina Skero


M&A expert says the market for travel firms ‘good but not frothy’


The outlook for travel mergers and acquisitions (M&A) is improving despite growing concerns about the state of the UK, US and global economies. That is according to


pressures on their own finances they don’t really change behaviour.” However, she warned


business investment would “slow dramatically” due to interest rates coming down more slowly and employers’ national insurance contributions and national living wage costs rising. Skero added: “The US


administration is driving uncertainty.” She described President Trump’s imposition of 25% tariffs as “catastrophic”.


corporate finance expert Nicola Sartori, head of consumer industries at business consultancy Grant Thornton UK, who said: “The travel M&A market continues to improve unlike the rest of the M&A market.” Sartori told the conference:


travel investments].” But she added: “That is so companies can reinvest.” What private equity buyers are lo


e looking for, she said, are “com


Nicola Sartori


takin


growth strategy and a focu


ing longer. There have


“The market is not buoyant but it’s positive. Private equity is still really interested in the sector.” She forecast: “We’ll see a lot


more exits by private equity [from


been lots of changes to customer behaviour and booking patterns and any buyer is going to want to understand [those], so due diligence is taking longer. “Valuations are not where they


were, and I don’t see that changing. “The market is good but not


frothy. There is a lot of uncertainty.” Abta to gauge CMA pricing focus Ian Taylor


Abta aims to prevent the Competition and Markets Authority (CMA) “doing anything daft” in enforcing guidance on holiday pricing from April. The CMA gains new powers to


decide on breaches of consumer law and to impose penalties next month. However, Abta director of legal


affairs Simon Bunce expressed concern at CMA draft guidance on ‘drip pricing’ and ‘dynamic pricing’ when he addressed the Abta Travel Finance Conference, saying: “We don’t want the CMA doing anything daft on this. We’re keeping an eye on it.” The CMA consulted in


December on draft guidance on unfair commercial practices under the Digital Markets, Competition and Consumers Act (DMCC) 2024


travelweekly.co.uk


which came partially into effect in January. This added publishing fake reviews and ‘drip pricing’ to a list of banned business practices. The guidance specified: “The


practice of showing consumers an initial headline price . . . and subsequently introducing additional mandatory charges – sometimes called ‘drip pricing’ – is prohibited. “Such mandatory charges


include . . . local taxes and other fees payable on arrival at hotels or on departure at an airport.” Bunce noted: “Prices have to be


accurate and not misleading.” But he argued: “Local taxes and charges payable at the airport or at the hotel have never been included in prices. They are not something travel organisers have any control over.” He said it’s “not something


customers are complaining about”


and added: “We’ve pushed back against this.” Bunce noted the CMA has


also “launched a project looking at wider aspects of ‘dynamic pricing’, including in travel and tourism”, after examining concert ticket sales


Simon Bunce


over surge pricing for Oasis tickets. He said Abta had asked the CMA


what it meant by ‘dynamic pricing’, saying: “Is it prices changing or ‘surge pricing’, because that is not what happens in travel?” Bunce argued: “Travel is very


good at yield management, so airlines don’t have empty seats or hotels empty beds. [But] that is very different to the Oasis tickets scenario.” The CMA issued an update last


week promising “a phased approach to guidance on this” following “substantive feedback”, with “a further consultation on revised draft guidance” this summer on aspects of the drip pricing guidance “that have created more uncertainty”. The consumer protection aspects of the DMCC come into force on April 6.


20 MARCH 2025 63


ommitted management, aw


a well-defined market proproposition, a credible gr


focus on higher margins”. She noted: “Deals are


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