Travel industry growth to outpace world economy, says WTTC

By Ian Taylor | 24 March 2015 at 08.23 GMT
The travel industry will grow faster than the global economy this year, according to the latest World Travel and Tourism Council (WTTC) forecast.

The WTTC’s annual economic impact assessment predicts travel and tourism will grow by 3.7% worldwide this year against a global economic growth forecast of 2.9%.

The Council forecasts the sector’s total contribution to the world economy will reach $7,860 billion or 10% of global GDP, up by $280 billion on 2014, and travel will account for 9.5% of all jobs in the world “once all direct, indirect and induced impacts” are included.

The industry accounted for 277 million jobs worldwide last year, according to WTTC estimates.

WTTC president and chief executive David Scowsill (pictured) said: “Travel and tourism continues to grow faster than the global economy and is an enduring source of job creation and a driver of growth for every region in the world.”

He added: “The sector has recorded strong economic growth in 19 of the last 20 years, providing much-needed economic stability at a time of global economic volatility.

“Governments looking for a sector which can create jobs and drive economic growth should focus on travel and tourism.”

But Scowsill noted: “This industry requires the right regulatory environment in which to flourish, along with progressive policies on visa access, taxation, human resources planning, and sustainability.”

In an interview with Travel Weekly, Scowsill hit out at the UK government for failing to address these issues.

He said: “The UK is not a good example of managing the sector.”

The WTTC estimates the US and China as the two biggest travel and tourism economies in the world, with Germany now in third place, having overtaken Japan, and the UK in fifth.

The Council expects Russia to be the only G20 country to register a decline in travel and tourism growth this year, due to sanctions imposed by the US and European Union over the Ukraine.

The WTTC forecasts South Asia will see the highest travel and tourism growth in 2015 at 6.9% year on year, against growth in Europe of 2.4%.

However, Scowsill said: “The long-term prospects for our sector are very encouraging.

“Travel and tourism will continue to grow faster than the global economy and most other major industries.”

Sourced from Travel Weekly

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Trade slams Cameron over ‘ignorant’ pricing comments

British prime minister David Cameron

Cameron accused travel companies of”deliberately” increasing prices during school holidays

The trade has slammed the prime minister for his “ignorance of the travel industry” following comments he made on the ongoing debate over the price of holidays outside of school term time.

In an appearance on the West Midlands’ Free Radio on Friday, David Cameron said that while prices can “go up because of the demand”, companies “sometimes seem to deliberately put up prices at holiday time”.

Aito and the ITT have reacted angrily to the news, which both bodies said showed a failure to appreciate how the industry works.

“It clearly shows a lack of understanding of the laws of supply and demand and indeed an even greater ignorance of the travel industry,” said Steven Freudmann, chairman of the ITT.

“We work in partnership with our other suppliers, hotels and destinations, and clearly he misunderstands if he thinks that we’re profiteering.”

Derek Moore, chairman of Aito, said that the prime minister had not listened to a recent parliamentary debate on the subject.

“Unfortunately this shows that David Cameron has not absorbed some of the details that came out during the debate as it was made clear there by many contributors that the major problem for tour operators is an increase of costs by their suppliers, primarily hotels and airlines,” he said.

“It seems a shame Cameron hasn’t understood this and has gone for the easy kill by blaming tour operators.”

The prime minister also suggested that staggering of school holidays could help ease the burden. He said that schools should be encouraged to adopt more flexibility over dates, which could help parents cope. However, he added that children should not be taken out of school during term time.

Both Moore and Freudmann agreed with Cameron on this point. Freudmann said he had “always been supportive” of removing some of the peaks and troughs from the school year, while Moore said this could mean “that some school holidays are outside of the peak weeks or months, during which European suppliers put up prices”.

Abta has chosen not to update its position in light of the prime minister’s recent comments. “We would welcome a serious review of the options of staggering by school or by region,” it said in a statement.

The ongoing furore over holiday pricing during the peak period was kicked off by a father who wrote on a social media site that he was “sick to death” of being ripped off by travel companies.

This helped ramp up the number of signatories on an existing e-petition, eventually prompting MPs to debate the issue.

Sourced by TTG Digital


Cimtig: School holiday price capping would destroy industry

Family

Ordering travel companies to cap prices in the school holidays would put many firms out of

business, attendees at the Cimtig Question Time heard.

The subject was one of many that came up as a panel of industry experts took questions from the audience.

The issue of the cost of holidays outside of term time has come to the fore after a Facebook post complaining of being “ripped off” went viral and there have been suggestions that prices in the peak summer period should be capped.

“It comes back to supply and demand. We’re all businesses. Most of us will make the majority of our money in peak season on the fact that we actually discount the rest of the year,” said Aoife Judge, communications and marketing director at specialist operator Canadian Affair.

Charles Starmer-Smith, head of travel at Telegraph Media Group, said that travel operated in a marketplace and was subject to the same rules as every other industry.

He added: “If you charge too much for a holiday people won’t take it, if you charge too much for a holiday they’ll be someone who can come in and undercut you and maybe corner your part of the business.”

Starmer-Smith argued that any changes to laws in the UK would be meaningless as hotels in destinations across the world could do what the liked.

He added: “Limiting the competitiveness of UK operators during those peak periods would send loads of them under.”

Joel Brandon-Bravo, managing director UK at Travelzoo, said his company’s “Parent Trap” petition had already received 33,000 signatures from people concerned over pricing.

Brandon-Bravo was concerned that not only were parents being fined for taking children on holiday in term time but that they were also being hit by Air Passenger Duty.

He added: “We feel that while dropping APD altogether right now is a ultimate aim for the travel industry as a whole, a realistic aim in the short term is to say ‘show that you want to support families that still want to go away, still want to tow the line and not take their kids out of school, who at the moment are being taxed if they do.’”

The other two members on the panel were: Nathan Philpot, sales and marketing director at Fred. Olsen Cruise Lines, and Nishma Robb, chief client officer at iProspect.

Sourced from TTG Digital


Why the dream lives on in the travel industry

Patrick Whyte looks at the evolution of the way holidays have been sold over the past 60 years

From the birth of mass-market package holidays in the 1950s to today’s vast vertically integrated travel companies, the business of selling travel has changed dramatically over the past 60 years.

Before that time, travel was almost exclusively for the wealthy.

It wasn’t until the post-war era that companies such as Thomas Cook and the Polytechnic Touring Association began selling trips to a wider audience.

“This really was the beginning of modern tourism. It opened up travel to the working classes as travel was, at last, affordable,” says John McEwan, who began his career working as an agent for Thomas Cook in Liverpool.

“Since then travel has become a very sophisticated business but at its heart it’s still about selling dreams.”

How companies sell those dreams is a process that has changed beyond recognition.

“Technology has been for me the biggest enabler and the biggest change,” says Hugh Morgan, who in the past worked for the likes of International Leisure Group and Intasun Holidays, and is now managing director of tour operations at the Monarch Travel Group.

“You’ve seen that with the OTAs. I think back to those days when you’d literally send a reservation and a rooming list and sometimes the rooming list would take three weeks to get to the resort.

“Nothing like late bookings existed. Brochures in those days would go on sale in December and by the end of January they’d be sold out and that was it – you knew exactly what you were going to do for the rest of the year.”

Today, we live in more uncertain times, with travel, more than most industries, at the mercy of world events. Terrorism, political unrest and natural disasters have all had significant impacts on the industry.

“We sit in an industry where it doesn’t take much to blow it off course,” says Richard Carrick, the former Hoseasons and MyTravel managing director.

“And we are always prone to that. That’s the norm, something will happen. And if your business model is somewhat fragile and you’re too dependent on one type of geography and one type of product, then you will suffer.”

One company which did suffer was ILG and its collapse in 1991remains one of the industry’s biggest failures.

The empire that was established and built up by Harry Goodman crumbled in the wake of the first Gulf war.

“Goodman was well ahead of the game and he had planned a pan-European airline well before the no-frills carriers,” says Morgan.

“Unfortunately it was struck down by the fact that the Gulf war started and the price of oil went through the roof, so he was landed with huge bills that they couldn’t fulfil.”

Goodman’s airline may have been grounded, but the 1990s witnessed a massive expansion of the no-frills model following the European Union’s decision to deregulate the airline industry.

The likes of easyJet and Ryanair flourished, threatening the more established travel companies.

“What’s interesting is that the big, vertically integrated companies with their own charter airlines were the original no-frills airlines. They operated on a low cost basis with very high levels of utilisation and very high levels of load factor. But it was almost as if we didn’t know what we’d got,” Carrick reflects.

“We allowed them as an industry to come up on our flanks – not unseen – but we were arrogant in thinking the package holiday was always going to be the preferred choice of sale to the consumer, as opposed to them just simply buying a seat only.”

This new threat, together with the challenges presented by the internet, meant that business was challenging in the 1990s and 2000s. The big four of Thomas Cook, MyTravel, Thomson and First Choice survived mostly on low margins and the market was flooded with capacity.

“The merger between Thomas Cook and MyTravel, quickly emulated by Tui and First Choice, brought a stability to the market, where supply matched demand in the packaged sector and provided an opportunity to improve margins,” says McEwan.

Morgan agrees: “I think we’re in a far better place after the consolidation. People are a lot more cautious in what they do, a lot more structured; there was very much a gung-ho cavalier approach to it, which over the years has become far more sophisticated.”

Sourced from TTG Digital


Sterling slide to hit travel more than triple-A downgrade

Weak pound ‘bigger threat’ than rating By Lucy Sierbert

The weakening sterling will have a far greater impact on the travel industry than the UK’s triple-A rating downgrade, experts said.

Graham Pickett, global leader of aviation and travel at Deloitte, said: “I don’t think the downgrade is a massive deal. The market has confidence in the government and that it will stick to its measures it [the downgrade] will be a non-event,” he said.

Chris Lee, head of travel at Barclays, added: “The downgrading of the UK from triple-A has long been expected by economists. Of the G8, only Canada and Germany haven’t been downgraded since the crisis, so the UK is far from an exception.”

However, the weakening of sterling is expected to have a greater effect on the travel industry.

Andrew Burnham, travel and leisure partner at MHA MacIntyre Hudson, said he believed there would be a longer period of weak sterling ahead. “I can’t see it returning this side of the autumn,” he said.

Burnham advised agents and operators to put a currency strategy in place.

Pickett was more positive but warned the industry to expect further currency instability this year. “Tour operators should be concerned about volatility with currency. The euro area and the UK are bumping along a stagnant profile of growth,” he added.

Barclays’ Lee said holiday sales were expected to remain firm, even if the pound remains weaker.

The pound was worth 1.16 euros and 1.51 dollars yesterday.

Sourced by TTG Digital


Opinion: Despite the squeeze, 2013 looks promising

Opinion: Despite the squeeze, 2013 looks promising

If the industry pulls together then 2013 could be a great year for travel, writes Victoria Sanders, managing director of Teletext Holidays.

Saving money was one of the top three resolutions people made this year along with reading more books and losing weight.

But for the millions of people who committed themselves to thriftier living, the year hasn’t got off to the best of starts.

This week I woke up to news about another above-inflation rise in train fares and headlines about energy bills soaring to more than £500 a quarter.

But despite the squeeze these things will have on the ‘leisure wallet’, I think 2013 is going to 
be a good year for travel.

In an attempt to help me with my resolutions, I did a quick search online for ‘how to save money’. Among the plethora of sites that appeared, I came across This is Money’s top 50 money-saving tips and found some really great ideas.

One of the key tips was to consider booking a holiday early this year. Excellent! However, the next tip on the list was to avoid high street travel agents and book the same trip independently online. Not so great.

Having found advice like this, I’m not surprised customers are saying that understanding the pricing of holidays, what’s included and, very importantly, what isn’t, has left them confused.

Extra charges such as taxes, administration costs and check-in fees all add up. The price they see online is often a long way from the final price they are quoted.

Bargain-hunting shows no sign of slowing down. But people are getting weary of headline-grabbing deals that aren’t all 
they appear.

With customers encouraged to make their holiday purchases online, it’s even more important for agents to clarify what consumers’ hard-earned cash will get them and who will really look after them.

Last year I talked a lot in this column about building trust. And part of that trust is about being clear and open about the bottom line price from the word go. But saving costs should not mean cutting corners on protection.

I’m pleased the Civil Aviation Authority is investing in talking to customers about Atol-protected holidays and I applaud Abta for its ‘look for the logo’ campaign.

Over the years we’ve had our fair share of complaints about advertisers’ pricing.

Although compliance isn’t always the sexiest thing, I’ve always thought that department is one of our greatest strengths.

Compliance to us means a team of folk who check prices, police advertisers and reject any deals that don’t add up. That’s essentially what agents do. They find the best holidays, with added value offers and can help people through the pricing maze.

When everyone is looking at their spending habits, we need to pull together in 2013 to demystify holiday pricing and protection and further amplify the message by shouting louder together.

Sourced from Travel Weekly


Agent makes £85,000 booking before quitting travel industry

Agent makes £85,000 booking before quitting travel industry

An agent has left her career in travel on a high, making a whopping £85,000 booking for a family to go on a Prestige Holidays trip.

Clare Fitzpatrick, of Brunlea Travel in Burnley, Lancashire, booked the £85,695 holiday for the family of four to go to Toronto for seven days, followed by two weeks in Bermuda.

Fitzpatrick, whose last day in the travel industry was Friday October 26, after 20 years in the business, said it was one of the biggest bookings she had ever made.

But she added that the family, who have been booking with her for the past 12 years, usually had holidays which cost a similar amount.

Her customers had booked twice before with Prestige, she said, and Brunlea Travel liked to work with the company because they were both independent businesses.

“We like to put business their way,” said Fitzpatrick of Prestige Holidays. “They are the experts, without a doubt. They know exactly what they are talking about.

“With every room request, they confirm straight away with the hotel. Nothing is too much trouble.”

Amid the high discounting culture that inhabits the travel industry, Fitzpatrick said building good relationships with customers, like the family she has worked with for 12 years, was the key to Brunlea Travel’s longevity.

“We have been an independent travel agent for 30 years,” said Fitzpatrick. “That’s why we are still standing, because of the level of service and the relationship we have built with our customers.

“People stay with us and I think that’s how we’ve survived.”

Fitzpatrick has decided to leave travel and work in a school because she has two young sons, and needed the holidays times that school staff have.

“That’s the only reason,” she said. “I would never leave travel for any other reason.”

She said she had a “fantastic team” at Brunlea Travel, adding that she was very sad to leave.

Commenting on the £85,695 booking, Prestige Holidays chairman and managing director John Dixon said: “It’s one of our biggest ever bookings.”

Sourced from Travel Weekly