Alan Cross, Jet2holidays’ director of trade relationships, believes 2024 will be all about the pursuit of value.
“In 2023, for a lot of people, a holiday was a necessity, not a luxury,” said Cross. “The trouble is, with the cost of living squeeze, sustainability effect and price increases – electric and heating bills – you have to fight harder to get the customer over the line.
“We’re getting this feedback from the trade. [Pre-Christmas] clients were saying, ‘I’ll just wait until the new year’. But they’re still coming in.”
Cross added: “I think customers will demand more and more value for money. Agents need to make sure they don’t get the idea into their minds that because people want ‘value’, they want ‘cheap’.
"That’s a whole different market. Yes, some budgets will be stretched – instead of 14 nights, it might be 13.”
Prices pushed up
Cross believes the average Jet2holidays selling price through the trade will top £1,000pp next year. The bad news? It is being driven by a combination of increased hotel and fuel costs, plus Jet2holidays’ own growth and the demand for its product.
Nonetheless, Cross freely acknowledges hoteliers are right to be mindful of their own margins as Jet2 – and other operators – seek more volume.
Cross said around 24% of Jet2holidays’ business came via the trade, down from 27%. “Last year was a follow-on from the pandemic. When that was happening, the percentage of business going through agents went up. It is back to what it was pre-Covid. We did expect that, and it’s still substantial numbers.”
However, Cross noted the share of agent bookings from some bases, like Belfast and Newcastle, had stayed the same. Belfast boasts a 38% trade mix, while Stansted, with fewer agents and bigger capacity, is 14%.
“If we increase capacity for Stansted, direct business goes up more than trade business,” Cross said. “In 2024, I think customers will demand more and more value for their money.”
Retail better for lates
Cross hailed the rebound in high street travel retailing, which he said had a spin-off benefit.
“Homeworkers aren’t so good at selling lates. A lot of homeworking companies get paid full commission at point of sale, not point of balance or travel. Because of that, they don’t care whether it’s a 2024 or 2025 sale. They just think, ‘book further out’. Retail will book lates better than homeworkers.”
Jet2’s proportion of package bookings versus flight-only is now past 70%, which Cross said meant scope for more trade sales. “The share of holiday passengers on that plane has increased dramatically – and a holiday customer is worth a lot more than a flight-only customer.”
Cross was predictably sceptical about easyJet’s tour operation, arguing Jet2 offered more beach destinations.
“A lot of what they do is domestic and city break flying. They’re selling non-Jet2 holiday destinations. We are very selective about where we fly, and when, to suit the demand of package customers. The product, quality and support when the customer is in-resort is not the same as on a Jet2 holiday.”
He also urged agents to be conscious of the threat posed by OTAs. “When you look at the top six OTAs, there are eight million seats that agents can’t book. One of the biggest is On the Beach, which owns [agent-friendly] Classic Collection.”
Cross also challenged Tui to put its money where its mouth is and deliver on its promise to support third-party agents – by not opening new stores.
