Sarah Smalley of travel research specialists Gfk Ascent-MI highlighted major challenges to the UK economy and its impact on travel.

She told delegates at the recent TTA Worldchoice conference that the UK has experienced the highest unemployment since the 90s, with average household wealth decreasing by £31,000, the impact of which has seen operator margins squeezed, with 10% (more than one million) fewer passengers this summer compared to 2008. But according to Smalley it’s not all bad news for agents.

 

She said: “Agents are far more successful in selling higher priced holidays so there’s more revenue to be had. Brits look at holidays as a necessity not a luxury and part of the reason agents have lost some market share is because they are very good at selling ‘loss-leaders’.”

Outlining current hot trends, which included all-inclusive holidays (up 6% from last year), with agents selling 240,000 more all-inclusive holidays this year over 2008, Smalley urged agents to focus on the value of holidays.

She said: “The short-haul market is down by 14% largely due to the impact of the euro, but the long-haul market is down by 11% so price is not necessarily the most important aspect. Agents should ask, upsell and upgrade as this is what makes them successful.”

Predicted trends for 2010 included an increase in cruising and a decline in both family holidays and self-catering breaks, with the former the hardest hit at 12% down on last year.

Upcoming hotspots included Tunisia, Kenya, Cuba and the west coast of the US.

Smalley said: “Agents are currently making 61p in every £1 sold and early indicators show this will increase to 74p for summer 2010.

For the last three consecutive months agents have been increasing sales.

This is very positive as winter holidays are typically taken as second holidays.”

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