NEWS Barclays Travel Forum: Market pressures and technology shape debate. Lee Hayhurst reports

‘Consumers are still prioritising spend on holidays’


he economic fundamentals for travel remain positive in the UK but the sector faces

some major challenges as margins are ‘squeezed’. Alistair Pritchard, partner and

head of travel at Deloite, said a widely-expected slump aſter the 2016 Brexit referendum failed to materialise. He also said that although the UK

economy was not growing as strongly as before the referendum, it was still growing and other factors such as wages, inflation and employment were positive. However, he said concern about

staff shortages, rising costs from business rates, auto-enrolment pensions and an increase in the national living wage were “squeezing margins”.

When Brexit was

delayed, people thought it might spur a boost. But generally we have not seen that spike

Unforeseen issues such as the

drone interference at Gatwick, and the grounding of the world’s fleet of Boeing 737 Maxs were causing further uncertainty, Pritchard said. However, Deloite’s quarterly

analysis into consumer sentiment suggests leisure travel is still a priority for consumers when it comes to discretionary income. “One of the things that’s come out of our work since 2016 is consumers

Pritchard: Firms are investing in technology to improve client experience and security

Travel firms are starting to invest more in technology to drive greater efficiency and improve online security, according to accountancy giant Deloite. Partner and head of travel

Alistair Pritchard said: “Over the years, a lot of investment has gone into customer experience. “Tere are increased costs and

margin pressure, so improved efficiency is something we are seeing investment in. Tat should also have an impact on the customer

10 30 MAY 2019

experience if they are having a smoother experience through the booking process and beyond.” Pritchard said offering good

security was also good for the customer experience and this was an area Deloite was seeing the aviation sector investing in. Technology such as biometrics is being deployed to offer a more-efficient and friction- free experience of airports and flying. He added that there was also

evidence consumers were returning to travel experts for advice.


Pritchard, Deloitte

continue to prioritise spending on holidays, which is fantastic,” Pritchard said. “It also tells us that it’s the experience that is really important to consumers. Te travel industry provides great experiences, so that’s really important.” Pritchard said the sector ended 2018 on a high aſter a record year, with overseas bookings up 12% and the domestic market “in rude health”. But then followed a “prety

challenging quarter”, he said, with the focus on Brexit contributing to a “really tough booking period”.

Alcock: Rising rates are double whammy for travel companies

Rising cost per click (CPC) rates and declining search volumes are hiting travel firms with a “double whammy”. Martin Alcock, director

of advisory firm Travel Trade Consultancy, said the UK market was in a “flat period” for bookings, although he was confident sales would bounce back. But he said: “If you are in the

digital space, you have fewer people looking, but you have to keep spending because you cannot afford

“When we got to April and the

[Brexit] delay, people thought that might spur a boost, and in certain niches we saw that. But generally we have not seen that spike yet. “[But] the consumer

fundamentals are still prety strong and they still tell us they want to go on holiday. I’m optimistic that we will see a stronger booking patern over the next few months. “What I cannot tell you is whether

that’s going to be domestic or overseas. That’s largely down to what the UK weather is like.”

Martin Alcock, Travel Trade Consultancy

to drop down the search rankings. “It means people have this double

whammy of not selling holidays and spending more to atract customers.” Paul Carter, chief executive of

Explore parent Hotelplan UK, said Explore was “courting the trade” as it looked for more business through agency partners to offset increasing direct acquisition costs.

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