'Panic' as holiday buyers take a break

Two more leading High Street travel agents joined the holiday price-cutting fray yesterday in what industry observers called a "panic" reaction to the large amount of unsold holidays.

The decision by Thomas Cook to give discounts of up to 40 per cent on selected summer holidays was rapidly followed by one of its chief rivals, Going Places, which is offering pounds 100 off holidays taken in June. The Going Places offer will only be available tomorrow.

British Airways also launched a promotion offering return tickets to Paris and Brussels for pounds 59 in June. BA Holidays is offering a free two- night trip to Paris for customers booking 14-day holidays in Mauritius and the Bahamas.

The sudden flurry of discounting follows last week's initiative by the UK's biggest travel agents, Lunn Poly, which cut pounds 100 off many June holidays.

The summer package tour industry has 10 million holidays on offer this year, half a million more than last year, but so far more than a third are unsold.

Observers yesterday blamed the glut of unsold holidays on new and "erratic" behaviour by consumers coupled with the continued absence of the "feelgood" factor, which has led many people to wait for discounts and to delay booking their holidays until they are sure they can pay for them.

Alex Woolfall, a spokesman for the Association of British Travel Agents, said many pro-spective buyers were also watching currency movements to see which destinations offered the best value. "Normally people would plan six months in advance for their summer holiday but now they are much less comfortable about their financial future," he said.

Jeremy Skidmore, of Travel Weekly magazine, described the discounts as "panic sales" and blamed the industry for making "unrepeatable" offers last year for early booking for 1995, only to repeat them this year. Holidaymakers now expected last-minute bargains.

Kevin Welch, marketing director for Going Places, which is owned by Airtours, Britain's second largest tour operator, said the industry had been "over optimistic" in its estimates of this year's market, which instead of the 5 per cent growth forecast was likely to show an increase of no more than two per cent and might remain static.