Terror alert compounds already desperate summer

Comment by Jeremy Skidmore (www.jeremyskidmore.com)

A bad August means absolute catastrophe in September, one beleaguered operator told me this week. That was before the terror alert.

It’s no exaggeration to say that the travel industry is unravelling before our eyes. Its structure is changing more than at any time since the first Gulf war.

The bookings slump this summer is unprecedented. It was with great sadness that we had to report the demise of Tapestry Holidays, run by the likeable Nick Wrightman (See separate story). It will be the first of many, because if travel companies cannot stay afloat in August, when the cash is supposed to be rolling in, what will the situation be in September and October, when the bills pile up?

The major travel companies are also suffering badly. Will they all be able to survive? Many have their doubts.

Industry commentators are blaming the poor bookings on the World Cup, the hot summer and now the terror alert, which is likely to make many families who haven’t booked their holiday decide to drive down to Devon and Cornwall instead.

Of course, these factors haven’t helped. But the problem is much bigger than that. Holidaymakers are rapidly changing their spending habits.

We’ve had the ability to book holidays on the Internet for years, but the way ‘dynamic packaging’ has taken off this summer has been incredible. The no-frills carriers have flooded the market and people who, just a few years ago, would have been scared of buying a CD online are now happily becoming cottage tour operators for themselves and their friends/families.

The package holiday, once a desirable goal, is now something that millions of people are turning their backs on.

In addition, destination operators, such as Tapestry, are at the mercy of any terrorist activity or flu virus because people always have the choice to take a cheap flight somewhere else.

Defendants of the package holiday point to the fact that millions still travel in this way. That’s true, and probably will be in five years’ time, but it is becoming increasing difficult to make money out of selling a package that people can put together themselves. The key there is making money – anyone can sell holidays if they are massively discounted, but we all know where that leads.

We are quickly moving to a situation where dynamic packaging on short-haul is the norm and packages are bought mainly for long-haul holidays and off-beat short trips. The number of people who need hand-holding to the Mediterranean – and consequently the number of operators that offer this service – will drop like a stone.

This change has been happening gradually for years, but we’ll look back on the summer of 2006 as the time when it really accelerated.