In fact, this description of a market phenomenon should be consigned to the industry’s history books.
I remember the days when we could guarantee every single seat would fill from the last week of July to the end of August, and when clients would clamour to book the last two-bed villa anywhere in Greece – at full price. Load factors were 100% and margins sky high, which covered our below-cost sales in low season.
So what’s happened to the so-called peak season? It’s not the impact of the football World Cup and it’s not the hot summer – although this year the heat has been a factor in the bookings slump that nobody expected.
The disappearance of the peak season has accelerated over the past five years. It began with the liberalisation of European air space and the rise in internet use in the late 1990s, which together conspired to sound the death knell of the charter flight.
To put it bluntly, there is just too much out there – too much choice, too many flights, too much accommodation – and the public is making full use of the opportunities.
The no-frills carriers launch with some very low seat rates, and the public now realises seats can be bought – even in the peak – for very little, so the numbers now booking overseas holidays in this way have increased dramatically.
We are therefore about to witness the coming of the age of the earlies market, and we all need to understand how to capture it and avoid losing it to the public’s appetite for self-packaging. This despite the total lack of financial protection, or of anyone taking responsibility for serious accidents in-destination, which could cost the holidaymaker dear.
The entry of the generally unregulated, non-tax-paying American giants like Airbnb, booking.com, Expedia and TripAdvisor into the UK market has enabled the public to self-package to a degree the traditional industry never thought possible.
If it wasn’t for the cruise market and the growing appetite of the middle classes for long-haul, tailor-made holidays booked well in advance, there would be far more travel agents in financial difficulty.
This year, lates peak-season prices to traditional European resorts are lower than in the low season because the peak season has failed to materialise – except perhaps for Turkey – no matter how low the price is. I do not see this changing in the future and it has been coming for some years now.
What has boosted the markets in Spain, Portugal and Greece over the past few years has been the problems in Tunisia, Turkey and Egypt. These problems are now disappearing and overcapacity – and the resultant cut-throat competition brought on by oversupply in every sector of the market, as well as the Brexit factor – will make life challenging, to say the least, for the traditional industry in 2019 and beyond.
Noel Josephides is Chairman of Sunvil
