Holiday Business Still In Troubled Waters

Fornells Menorca


Recently the share price of one of the UK’s leading tour operators, Thomas Cook Holidays, dropped by over 27 per cent in a day in the same week that government statistics showed that the average disposable household income in the country had fallen over the last 12 months, the outlook for the overseas travel market is still pretty negative.

There were hopes in the travel industry that summer 2011 would be a turning point, and figures for April were encouraging, with Cyprus enjoyng a surge in visitors compared to last year, and other Mediterranean islands like Menorca experiencing a revival in bookings.

But Easter could have been a false dawn. Easter was later this year and coincided with the royal wedding and an extra official day off, meaning that many people could take a ten or fourteen night break without using up too much of their annual leave entitlement.

The industry has reacted by offering good deals for the peak summer weeks, cutting down on the availability for next year, and TUI, the owners of First Choice and Thomson Holidays announcing that from 2012 First Choice would be offering exclusively package deals.

Some historically popular vacation areas have benefitted from political unrest, with many people reluctant to book trips to reletaively new mass market destinations such as Egypt and Morocco, and returning to former favourites like Menorca.

Menorca tried something new for the island to try and reach out to those who had holidayed there before and to appeal to new visitors by doing some direct marketing in the UK earlier this year, with a road show that took in several of the UK’s major cities with some success for the Menorca hotels who took new bookings for this summer.

A recent announcement from Thomas Cook Holidays showed clearly that no matter how hard Menorca might try to attract Brits for a holiday, they’re currently facing an uphill struggle with Thomas Cook having – as the Daily Mail put it – a ’900 million hammering’ on their share price after announcing recent results.

It represented an eight per cent fall in one day, and statements from the holiday firm underlined that the whole travel market far from seeing a rise in bookings, is seeing them stay static at best, and decling further perhaps.

Their chief executive Manny Fontenia-Novoa told the media that the drop in holiday bookings was because people had less money to spend – and his statement was backed up in the same week by government statistics which showed that Britons have less disposable income this year compared to last – and that the current trading conditions were the worst he head ever known.

While acknowledging the ongoing difficult trading conditions in the UK with low consumer confidence as a major factor in the drop in holidays being taken, he also pointed out that the political problems earlier this year in areas which had become popular recently – notably Egypt, Morocco and Tunisia – had also had an impact. But that might be a silver lining for tradtional favourites like Menorca holidays to benefit from the shift in booking patterns.

But no matter what the shifts in destinations are, the overseas travel industry is going to have a difficult time for at least the next twelve months. Real household income has dropped, with take-home pay falling for the first time in thirty years, and with less money available for the majority of the population big ticket items like an overseas trip. Gone are the days when the trend was for two or three holidays a year.

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Cala En Porter - Child Friendly

Cala En Porter - Child Friendly