The public is still keen to book holidays despite gloomy economic predictions, the Confederation of British Industries reports this morning.
In a gloomy services sector survey released today, the CBI said profitability had fallen at record rates over the past three months for consumer facing companies in general with levels of business volumes and values remaining weak and neither consumer nor business services in the least bit positive about expansion over the coming year.
But it added that the only consumer services sector to report growth in business over the last quarter was travel services. CBI Chief Economic Adviser Ian McCafferty said: “Services sector firms are concerned about their business prospects. Consumers are reining in spending on leisure, entertainment and eating out, while professionals offering services such as accountancy, property and law have seen their profits flatten off as costs continue to grow strongly.
“There are some exceptions though travel companies reported healthy demand for holidays in the past three months, with people more inclined to take a well-earned break as rising costs put greater demands on household spending.” However, the report adds that rapid cost rises and a limited ability to pass these onto customers meant profitability in travel had fallen at the fastest rate for five years. The survey polled 143 firms between April 23 and May 7.
ABTA spokesperson Frances Tuke said: “Although we don’t have hard research on this, anecdotally we see very positive aspects and underlying strengths for the industry, particularly long-haul and mid-haul travel and the US in particular because of the weak dollar. “There may be a downturn but people are making priority judgements and putting off the new car, the DIY and the days out in order to still be able to take a holiday.”
