It will all end in tears: Comment by Jeremy Skidmore

As tour operators brace themselves for a long, hard summer, they could be forgiven for wondering what on earth they are doing in this business.

Do you know a single company which can honestly claim that bookings and margins are up this year? Everyone I know – even those who specialise in the supposedly popular resorts outside the Euro zone like Turkey, Croatia and Bulgaria – is having a tough time.

We all know May is a difficult month for selling holidays, but it’s not usually this bad.

And it isn’t going to get better any time soon. The European Championships in June will stifle travel as people prefer to stay at home to watch the games.

The peak season, as usual, will be make or break for many companies but surely this year several won’t make it.

The problem is not selling holidays – anyone can get rid of packages at £79 a time – but selling them profitably. There’s just too many on the market and, consequently, too much choice for holidaymakers.

As Noel Josephides, managing director of Sunvil Holidays, says: “I really can’t remember anything as bad as this in all my years in tour operating. Ryanair and easyJet have added 20 million seats to the market. The choice for people is phenomenal and they are shopping around.”

It’s not just the tour operators who are struggling. At the recent Guild of Business Travel Agents’ conference in Shanghai, bmi commercial director Adrian Parkes sounded like a beaten man.

The airline is ploughing ahead with the disastrous policy of offering a full service on routes from Heathrow while trying to compete on price with the no-frills airlines.

“We’re not making profits anywhere,” he said.

And just when you thought it couldn’t get worse, a few more bombs went off in Turkey and the sun started to shine in the UK.

So where will it all end?

Surely in tears for some and relief for others.

The truth is that not every company can or should survive and the industry needs a few collapses or, at the very least, major consolidations with airline and holiday accommodation taken out of the market.

This year the balance has swung too far in favour of the public with prices cheaper in actual as well as real terms than a decade ago.

Holidaymakers should enjoy it while they can because some sort of stability must return to the industry. Airlines and operators cannot make losses indefinitely.

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