UK Recession Could Affect Menorca Holiday Trade Again


Cala'n Porter Menorca

There will be alarm bells ringing across the travel industry following recent government statistics in the UK showed that many families will be over a thousand pounds a year worse off this year than last.

With no immediate signs of the economy improving enough to address that, tour operators and villa holiday companies will be trying to figure out just how many holidays they should be offering in their 2012 brochures.

And with more people booking last minute to try and grab a bargain, planning just how many holidays to cater for in 2012 is a logistical nightmare for the big tour operators like Thomas Cook, First Choice and Thomson Holidays.

For an island like Menorca, which is popular for villa holidays, it also brings into the equation of how many villas the specialist companies should be offering in their portfolio for the traditional popular months of May to September.

James Villa Holidays who are the number 1 specialist company in the UK will also be aware that many villa owners will be advertising their accommodation privately, and might well cut their prices sharply to attract clients who might previously have been with the company.

So the likely scenario is that the number of people in the UK who take holidays in Menorca and elsewhere next year will be down on this year, and there’s only so much tourist boards and tour operators can do to attract people and still make money.

TUI, Britain’s biggest two holiday companies, First Choice and Thomson Holidays, have already taken the initiative by announcing that First Choice will from next year be only offering package holidays – and if they plan too many watch out for their late deals as they could be a good source of bargains last minute – Thomson Holidays meanwhile will still be offering packages, but flights and hotels will still be bookable seperately on the Thomson Holidays website.

The mountain these companies have to climb next year has been clearly illustrated by recent government statistics, including in August the news that only one in four workers will be getting a pay rise this year – and with inflation running at over 4% and taxes going up it doesn’t take much to work out that the amount of disposable income for many UK families is going to be less in real terms in 2012 than this year.

And it’s not going to be the first year that households across the country are going to see a fall in living standards – in 2010 disposable income dropped an average of 0.8%, the first drop since 1977. While not a huge amount in itself, it will certainly begin to tell for many families with inflation running high, and deciding if a holiday is a necessity – a claim made by many in the travel industry as recently as March this year – or a luxury they can do without for a while.

Another factor that is hitting holiday destinations like Menorca, and in particular the hotels in Menorca, is the reduction in time people who are visiting spend on holiday. Down from a typical fortnight to often ten days – and all inclusive packages will rise further in popularity next year, making the decision to have First Choice offer packages only seem an imminently sensible one.

Recent volatility in the currency and stock markets in Europe and the U.S. shows that the recovery in the Western world is slow and some will say weak – and with this in mind many travel businesses will cut the availability of the number of holidays they are offering in 2012, hoping that this will keep prices higher than this year.

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