With 2019 proving to be a tumultuous year, the travel industry will be hoping 2020 is calmer.

And despite the continued repercussions of Thomas Cook’s failure, there are grounds for optimism as the new decade begins.

Brexit

The Brexit row may finally be resolved, and after three years the public may have got used to its key effect on holiday costs – namely the 20% fall in sterling since 2016.

“People have largely concluded life goes on and they are not changing their behaviour,” says The Travel Network Group’s (TTNG) chief commercial officer Vim Vithaldas.

“Everyone is fairly content going into 2020, but the challenge we have is around peaks. There’s the Brexit deadline. Whatever happens, we’re looking for some certainty and if that exists, we expect a good 2020.”

With Brexit now all but certain to happen on 31 January following the Conservatives’ general election victory, worries about disruption to travel to the EU have receded, particularly as the “transition period” should ensure none of the border chaos predicted in the event of a no-deal Brexit.

Cook fallout

Cook’s collapse meant that about 20% of beach holiday capacity and leisure airline seats disappeared, according to estimates by On the Beach Group.

Chief executive Simon Cooper said in November: “This has created significant short-term lack of seat capacity as well as an unprecedented opportunity in the medium term to gain share.”

Data from Cirium shows where gaps existed. Manchester was the biggest loser airport-wise from Cook’s collapse, with the operator’s airline accounting for 1.19 million seats last summer or 10% of the airport’s total.

Other big losers were Gatwick (712,000), Birmingham (332,000), Bristol (255,000) and Glasgow (254,000).

However, key players were quick to fill the vacuum. EasyJet paid £36 million for Cook’s Gatwick and Bristol slots, with Jet2.com purchasing others at Manchester, Birmingham and Stansted.

Next summer, easyJet and its new package tour operation will have an extra 130 slots per week at Gatwick and 25 at Bristol, while Jet2 has an extra 280 a week (plus five additional aircraft) at Manchester, 95 at Birmingham, 62 at Stansted and 25 at Bristol.

Separately, British Airways picked up 27 Gatwick summer slots from Tui.

Jet2 plans to grow its Atol from 3.9 million passenger numbers to 4.5-4.6 million in 2020. Tui sits at 5.55 million but will add another two million seats next summer.

Jet2 has put significant extra capacity into Turkey and Greece for summer 2020, with at least six new Greek islands on sale.

The brand will also grow its airline capacity by 14%, so along with Tui should replace the 2.4 million Atol packages Cook’s main brand offered, with Tui, for example, already filling Cook’s shoes in Gambia and Cuba.

EasyJet Holidays, meanwhile, plans to double its current 500,000 package sales in 2020.

While the Cook name will be revived under new Chinese owners Fosun, Thomas Cook Airlines won’t be, and the pool of smaller carriers from which operators can buy seats is diminishing.

This means charter airlines like Titan Airways and Poland’s Enter Air could well be in demand in summer 2020.

Cruise

Cruise lines show no sign of slowing growth, with 25 ocean vessels and 15 river cruisers set to launch in 2020, compared with 24 ocean and 11 river ships in 2019.

Six of the 2020 launches will carry more than 4,000 passengers and they start in the spring with Virgin Voyages’ much- anticipated Scarlet Lady.

The UK and Ireland cruise industry reached the two million passenger mark in 2018. Clia said it “no longer made predictions” about the market size, but added: “Four of the new ocean ships will be launching in the UK, which shows the strength and confidence of the UK cruise market.”

Destinations

The shift of short-haul capacity back to the eastern Mediterranean and North Africa is set to continue in 2020.

Sharm el Sheikh is back after the four-year UK flight ban was lifted in October, with Tui returning in February 2020, while Tunisia will further re-establish itself as a summer and winter destination.

The reappearance of both should ease the capacity squeeze in the Canaries, which has attracted the bulk of the displaced winter sun market in the past few years.

“An old favourite, Egypt, is coming back and people can’t wait to book it,” says TTNG’s Vithaldas. TTNG expects further growth in cruise and long-haul, with sterling still providing value in destinations like the Far East.

Turkey is another winner, but Iceland will see a decline in 2020 as the stronger krona and the demise of Wow Air continue to bite.

Visitor numbers fell 23.6% year-on-year in May and have seen double-digit decreases since.

The Centre for Aviation estimates Iceland experienced a 26% drop in flights in 2019 and visitor numbers this year are expected to fall to 2017 levels of around 2.1 million, although this compares with only 550,000 in 2011.

Airlines

This year will see a brief respite from transatlantic budget airline expansion. Wow Air’s failure in March and Norwegian reining back means fewer cheap seats across the Atlantic until 2021, when New York’s JetBlue comes to the UK.

In short-haul, the loss of Thomas Cook may mean more expensive fares this summer, while Brexit’s impact on an industry that buys oil in dollars could add to profit pressure.

Scheduled airlines are taking a mixed approach to 2020. After more than a dozen route launches in 2019, some of them long-haul, British Airways has revealed one new long-haul route, Portland, and seven short-haul for 2020 but Virgin Atlantic is filling former Thomas Cook long-haul capacity at Manchester.

Iata predicted total world airline profits would fall $2 billion to $28 billion in 2019 and the outlook remains cautious.

Environment

The Extinction Rebellion movement that gathered pace in 2019 will only get bigger, with “flight shaming” high on the agenda, particularly as the UN Climate Change Conference takes place in Glasgow in November.

At least two carriers – KLM and Emirates – have urged consumers to reassess how they fly, but they do so perhaps safe in the knowledge that in many markets most will not heed this advice.

Nevertheless, business advisory firm BDO warned: “Saying ‘we have a plan to offset’ is no longer good enough”, and the new UK government’s thinking on aviation taxation and even Heathrow expansion may be influenced by the changing mindset.

“We know we need to go further and faster, and that as other industries decarbonise quicker, the spotlight will be on aviation if action is not taken,” said Tim Alderslade, chief executive of Airlines UK.

Meanwhile, ahead of the UN conference, UK-based Sustainable Aviation’s road map for achieving net zero carbon emissions will be published.

“We know net zero is within reach and that if we can set out a credible plan, we’ll avoid the kind of regressive demand-side measures that will restrict growth and damage our international competitiveness,” added Alderslade.

Airline Insolvency

Cook’s collapse once again saw all clients repatriated whether or not they were Atol-protected. A similar situation following Monarch’s failure in 2017 prompted the previous government’s Airline Insolvency Review.

The government included plans for new airline insolvency legislation in last month’s Queen’s speech, including formally tasking the CAA with repatriating both Atol and non-Atol protected passengers when an airline goes bust.

Some fear such a move could “completely undermine” the Atol scheme. Airlines could also in future be permitted to repatriate their own passengers following insolvency through a special administration regime to keep aircraft flying for a short time.

Another suggestion is extending the CAA’s regulatory powers to improve oversight of airlines’ financial health to mitigate the impact of future failures.

Industry bodies, including Abta and Aito, have called for a full consultation on these proposals.

Mergers and Acquisitions

According to BDO, there were between nine and 11 acquisitions involving outbound operators or agents each year between 2014 and 2018.

In 2019, there was only Hays Travel’s purchase of Cook’s shops from liquidators, Cox & Kings UK’s distressed sale to Abercrombie & Kent, Super Break’s sale from administration to Wowcher and Portman Travel Group’s acquisition of If Only.

BDO said the lack of 2019 deals was “due to uncertainty with what future UK economic growth looks like – and the best evidence of this is in sterling’s depreciation”. BDO believes this will change in 2020, saying there are “unseen levels of global money... that needs a home”.

It predicts: “Growing travel businesses will attract strong investment interest.”

Events and anniversaries

The glorious 2018 UK summer and football World Cup saw outbound sales plummet. There was respite in 2019 but this summer sees Euro 2020, running from 12 June to 12 July.

The final is at Wembley, with games held in 12 countries, which may pique interest in continental Europe afterwards.

Then comes the Tokyo Olympics, from 24 July-9 August. Japan is likely to experience a spike in tourist numbers after the games as hotel prices fall and pent up demand is unleashed, so it’s maybe one to suggest to long-haul clients.

September sees the 400th anniversary of the Mayflower Pilgrims arriving at Cape Cod, while Berlin marks 30 years since Checkpoint Charlie was dismantled.

Throughout 2020, Ireland’s Galway and Croatia’s Rijeka are European Capitals of Culture.