Luxury travel firms confirm bookings slowdown

 

Forward bookings have slowed for the majority of luxury travel companies.

Research coducted as part of International Luxury Travel Market found that 62% had seen a fall in forward bookings in the final quarter of 2008 over the same period last year.

The findings coincide with a forecast of lean times ahead for the luxury travel sector in a report by PricewaterhouseCoopers (see previous TravelMole story).

But luxury travel firms believe that recession will slow growth rather than stop it in its tracks. 

Sixty two per cent say the industry – which has grown by 10% year-on-year for the past five years – will continue to grow albeit at a slower rate. 

They will combat recession by focusing on marketing and building the skills of front line staff.

More than three quarters (77%) say they will increase or maintain their marketing spend and 91% that they’ll increase or maintain their spend on staff training and development. 

Eighty seven per cent will dedicate marketing budgets to opening up new markets though most – 76% – won’t reduce their spend in traditional markets in order to do so. 

Electronic channels will become increasingly significant, with 63% saying they’ll favour them above more traditional media.

Though 73% of respondents say they’ll seek operating cost reductions, they won’t do so at the expense of staff. 

More than half (56%) will maintain staffing levels while one fifth (20%) will recruit more.  

Forty per cent will spend more on staff training and development while 51% will maintain their spend.

ILTM exhibition director Christina Wood said: “It’s clear our audience is squaring up for a fight to hang on to market share and secure any growth opportunities that occur.

“And they’ll do so by investing in marketing and building skills.  Online channels will be favoured, not because they offer a price advantage over traditional media, but because they allow closer, more intimate relationships with consumers, whose decisions are increasingly influenced by participation in online social networks. 

“And networking is very much the name of the game; within the industry, events that offer face-to-face, relationship building contact between buyers and providers will be preferred.”

The expert panel that debated the research findings during an ILTM Future Forum event re-iterated the importance of one-on-one marketing, not just between providers and consumers, but between providers and the distributors and travel agents. 

The panellists offered the following tips for fighting the recession:

·                         Accept the volatility of the current economic climate – plan ahead but be prepared to re-forecast and adjust strategy in real time

·                         Continue to communicate, using marketing budget to maintain brand presence as well as support sales

·                         Focus on personal relationships – with consumers and channel partners alike – with one-on-one marketing, transparent pricing and 100% service commitment

·                         Cut costs by reducing bureaucracy – not by compromising service performance

by Phil Davies