ANDREW OXLADE: Why you shouldn’t expect a bargain holiday in 2013

| September 28, 2012 | 0 Comments

Andrew Oxlade

08:36 EST, 28 September 2012


09:48 EST, 28 September 2012

Getting ready to bag a 2013 bargain break in the sun?
Think again.

Each year, a game of chicken develops between holidays companies and holiday shoppers.

Here’s the usual pattern of things: the increasingly cost-conscious British consumer starts tracking prices for the 2013 getaway in the early autumn of 2012, but holds back from booking on the hope the tour operators will be stuck with too much capacity.

Bargain break in the sun? The indicators suggest you'll face a tough headwind

Bargain break in the sun? The indicators suggest you’ll face a tough headwind

By December, the holiday companies start getting twitchy and trim prices. By February, the discounts have the whiff of panic.

The other scenario is where the consumer loses the game of chicken, finding in the spring that there is little choice and prices are high.

This year the industry, which is highly exposed to economic turbulence, seems to have got its act together and matched supply with demand. 

TUI, the company behind First Choice
and Thomson, is the UK’s biggest operator and far stronger than its
nearest rival.

Yesterday its boss, Peter
Long, said that not only did they sell nearly all 2012 holidays but that
sales for next summer are up 10 per cent on this position last year. And
average prices for next year are up 3 per cent. This is not what a holiday shopper wants to hear.

But hey, TUI is the market leader. How about struggling rival Thomas Cook?

The recession years have been tough for Britain’s oldest travel agent. It assuaged fears
of a collapse last November by taking £200million of loans from its
banks, while a new boss has been recruited to revive the business.

Its trading update today suggested that – much to the relief of the staff – things are heading in the right direction. The shares rose 5 per cent.

Thomas Cook gave no detail on next year but it said average
prices this year were up 8 per cent, adding that a rush of late bookings had soaked up capacity, with Turkey, Greece and Spain in hot demand.

You’d imagine that one of the wettest British summers in living memory
has spurred this healthy bounce back for holiday companies. But as TUI boss Peter Long points out,
consumers seem willing to give up other discretionary spending rather
than their cut back on their annual spending.

Try and back a bargain if you can, but the early indicators suggest that you may lose in this year’s game of chicken.

Follow on Twitter: @andrew_oxlade

Roasting: Turkey, one of the hottest destinations in the Med, has seen strong demand. Picture: Lycia at Olu Deniz

Roasting: Turkey, one of the hottest destinations in the Med, has seen strong demand. Picture: Lycia at Olu Deniz

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