Book now? Not likely, sunshine

The January rush to buy summer holidays fell flat again this year
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The Independent Travel
Gloom, doom and despondency: these terms seem to apply ever more readily to the people who sell us dreams, or at least a fortnight in the sun each summer. We are simply not behaving as the travel industry would like, and our fickleness could lead to another glorious summer of bargain holidays, although there are not likely to be quite as many as last year.

Only a month ago the major players in the travel industry were feeling more optimistic than they had done for months. As they launched the traditional post-Christmas discounts, which ranged from 10 to 15 per cent off standard package holidays, the retail chains braced themselves for a flood of customers.

Several factors pointed to a bumper booking period. The discounts that were offered at the launch of the summer '96 brochures in September had failed to tempt people, so there were still plenty of potential customers around. On top of that, there were fewer holidays on the market. After last year's peak-season discounts the top five companies reduced by one-ninth the number of holidays they were offering, and warned customers that this year there might not be enough holidays to go around.

Peter Shanks, purchasing director for the second biggest agency chain, Going Places, confidently estimated 2.25 million package holidays would be sold in January compared with 1.3 million during the same period last year. But a month is a long time in travel retailing. In the week after Christmas, bookings were down 30 per cent on the corresponding period in the previous year and Mr Shanks has admitted that his estimates had been far too optimistic.

There are various reasons why most people have not yet booked. Many just expect bargains galore again this summer. For years they have been able to get a last-minute discount on some sort of holiday, and last year they got a last-minute discount on virtually anything going. The message about fewer holidays has gone largely unheeded, not least because travel programmes on television have encouraged people not to book yet.

Spending habits appear to have changed - the days when people booked 12 months in advance have gone, and not necessarily solely because of price. People may not be looking for a last-minute bargain; they might simply prefer to book a holiday far nearer the time of departure.

So where do the January non-sales leave us, the people who are failing to behave as the industry would like? Despite the cutbacks, there are still around 5 million summer package holidays left to sell - roughly the same as there were this time last year for summer 1995. So, unless there is a significant upturn in the market, there will once again be plenty of possibilities for people waiting until the last minute before booking.

Yet there probably won't be quite as many bargains available this summer as in 1995, because operators are likely to cut their capacity back further next month. Airtours, the second biggest operator, has already said it is prepared to take that step.

Roger Corkhill, managing director of Cosmos (the sixth biggest UK tour operator), estimates that at least another 5 per cent of capacity needs to be taken out of the market to match supply with demand. But he doubts the cutbacks will be that high and thinks that the travel industry is bound to suffer again this year. "People have been used to getting a holiday at below cost price at the last minute and as far as the travel industry is concerned, I don't think there is great cause for optimism for this year or 1997," he says.

The problem is that the top three operators - Thomson, Airtours and First Choice - have their own airlines, Britannia, Airtours International and Air 2000 respectively, which they need to fill with holidaymakers. By cutting back on the number of holidays, they cut their own flight bookings, and lose money through poor use of their aircraft instead of by discounting holidays.

So my guess is that supply will continue to outstrip demand, and last- minute bargains will be available for holidays in April, May and June. It could be tight in the peak period of mid-July to the end of August, so if you want to be sure of a bargain, opt for Greece or Florida. Operators report that bookings to Greece are even worse than last year, and that there is excess capacity to the sunshine state now that Laker Airways is flying to Florida once more. Come the summer there should be plenty of them trying to offload holidays to both destinations.Between now and April, when the summer flight season kicks in, tour operators will try to get full brochure prices for their holidays, but expect to see some more selective discounting around the 10 to15 per cent level. And, a final note, remember that prices have risen significantly for summer '96. Discounts of 15 per cent don't look quite so tempting when the base price has risen by around 7 per cent.

The writer is associate editor, news, of 'Travel Weekly'.

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