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


‘Consumers are still prioritising spend on holidays’


T


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.


Alistair


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.


travelweekly.co.uk


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