As life returns to normal post Covid-19, I have again returned to the Ski slopes this winter to feed for my addictions for “white speed” and boozy Après ski nights out, with family and friends across European Ski resorts.

Historically, Ski holidays were part of the “mainstream” with each of the big four tour operations each having ski brands. These rarely made large profits, but were another way of utilising their internal charter aircraft in the quieter winter months, even though fixed weekend hotel “changeover” dates did force many peak Saturday or Sunday morning slots to be handed over to the ski division.

Each holiday was usually a weeklong and included all the key ski holiday elements of flight, accommodation, transfer, and ski packs for one inclusive price. This created both a convenient “one-stop” purchase for customers and allowed buying power via scale.

So why over time has this market virtually disappeared, with there now remaining only relatively small ski tour operators, who no longer operate or own charter flights?

Like many things in our industry, I believe it is a combination of the growth of low-cost carriers and customer access to the internet, which has created a large DIY marketplace.

For example, when traveling to Andorra to ski, I use Skyscanner to find the best combination of flights from the North and South of England, which arrive at similar times, so that I can combine the various members of my dispersed family on to one private transfer from Barcelona for the 3-hour journey to the resort.

I then use Andorra Travel service a local resort-based ground handler to book my hotel, lift passes, ski hire, and even restaurant bookings, to complete my complex ski needs.

Many upmarket Ski operations have built similar business models, using low-cost airlines to provide non-committed flight stock, to power their destination-specific tour operations to Verbier or other well-known ski resorts.

Ski holidays on average cost twice as much as a 7-beach holiday, so initially it may seem surprising that none of the top 5 UK ATOL holders, including the people providing most of the flight capacity for the ski market i.e. Jet2 or Easyjet, have created their own tour operations to exploit the demand created.

The complexity of the product is probably the main reason for the lack of interest, as it does not fit into a simple online booking journey and would require call center staff and in-resort, operations to deliver effectively. Brexit and in particular French restrictions have effectively banned UK staff from providing traditional repining and childcare services, that are still available in large beach hotels.

Transfers have also become much harder, as traditional weekend hotel “changeovers” have been scrapped, with customers now arriving throughout the week and often for 3-4 days ski breaks over weekends. Hotels have adapted, by charging more on a nightly basis to cover any gaps in occupancy compared to the easier back-to-back week holidays. 

However, it is now much harder for ski tour operators to focus enough demand to fill the 56-seat coaches, that used to dominate the transfer market now that they are not delivering 100s of skiers on one charter flight. Often, the airport-to-resort transfer element now costs more than the flight itself.

In some ski destinations like Andorra, local coach businesses such as “AndBus” are thriving, offering 2 hourly pre-bookable, low-cost shuttle services from Barcelona and Toulouse to resort. When talking to “Andbus” owners, it is fascinating to discover that hardly any sales come via UK tour operators or travel, with most customers discovering the service by word of mouth or Facebook groups.

I do have to wonder if homeworking groups are missing a trick here, by not working more closely with local ground handlers, to create high margin Ski packages for often affluent customers that may also book other high-end summer holidays. Bluntly, if you can afford to ski you often travel on holiday multiple times per year.

Adding expertise and value to complex long-haul holidays has allowed many homeworkers to thrive, so why not explore Ski?

It may be more complex but the crucial in-resort partners are out there if you look.

During the recent ITT conference in Qatar, I posed a direct question to Garry Wilson, CEO of Easyjet Holidays. I asked, “At present, 2% of EasyJet’s 100 million seats are sold as holiday packages. To become the market leader, this volume would need to triple to 6%. However, presuming the overall market does not expand this swiftly, from whom do you anticipate taking market share?”

Garry’s diplomatic response was that the growth would originate from converting more of EasyJet’s flight-only customers into holiday packages.

This straightforward remark underscores the significant strategic advantage of EasyJet Holidays over its competitors.

Over its lifespan, EasyJet has cultivated extensive brand recognition. This, bolstered by prominent advertising, generates enormous visitor traffic to its website. Here, customers are automatically presented with a cross-sell option to purchase a holiday package in addition to the flight to their chosen destination.

EasyJet has publicly stated that 88% of its Holiday Divisions traffic comes from “Free” sources, which gives Easyjet Holidays a dramatic advantage over OTA who spend 30% of revenue on advertising costs. Consequently, they are positioned to either offer the most affordable pricing, maintain superior profit margins, or effectively balance these considerations.

Converting another 4% of their 100m flight passengers to holidays is a straightforward task, and itself would make Easyjet Holidays the UK market leader. However, why would they stop here?

Consequently, the question facing many travel boardrooms is, “Who will lose share as EasyJet Holidays expands?” and “How do we make sure it’s not us?”

The answer will be significantly influenced by the distribution channels EasyJet Holidays focuses its efforts on.

Jet2 Holidays have stolen the march in distribution via travel agents, flexibly allowing agents to decide their commission levels. However, if agents want price parity with the company’s online pricing, their earnings are limited to a low 6% commission payment, potentially making them vulnerable to attack by Easyjet.

Interestingly, Jet2 Holidays’ current success in transitioning its business into a tour operation-led group presents challenges to further growth. Currently, 60% of Jet2’s flight seats are packaged as holidays, and this proportion rises to 80% for “beach holiday” routes. Therefore, unlike Easyjet, they must broaden their route network to expand their holiday business further, leading to the initiation of new bases, like Liverpool. However, this expansion process is considerably slower than simply increasing the share from 2-6% of flight capacity.

Historically, Tui’s tour operating branch boasted a “differentiated” offering through exclusive hotel contracts with some of the most ideally situated establishments. However, the repercussions of Covid-19 and the substantial debt incurred by the Tui group have significantly reduced its exclusive inventory, exposing it to vulnerability in short-haul locations within Easyjet’s flight range. Nevertheless, Tui’s fleet of 13 Dream Liners provides a distinctive advantage, enabling the holiday firm to provide long-haul beach vacations to destinations such as the Caribbean, USA, Mexico, and Goa, an offering that Easyjet cannot match.

The top online travel agencies (OTAs) face the greatest threat from expanding low-cost carriers’ in-house tour operations, given that they lack proprietary airlines and rely on access to third-party flight seats. Paradoxically, their key strategic advantage is the access to low-cost seats of Ryanair, an airline that has publicly expressed disdain for them.

Featuring all the low-cost carriers equips the OTAs with a superior flight program in terms of route diversity and scheduling. However, if they are burdened with Easyjet’s API booking fees amounting to £6 per individual per sector, leading to a substantial £48 price disadvantage for a family of four, they evidently cannot compete on equal footing in terms of price with Easyjet. Nevertheless, by utilising Ryanair flights, they often can match or even surpass EasyJet’s holiday prices on numerous routes, making access to Ryanair, the only low-cost airline without an in-house tour operation, a vital strategic defence.

Online holiday consumers typically browse 23 websites before finalising their booking, reflecting their considerable promiscuity when choosing the holiday brand to book with. This tendency is frequently fuelled by Google PPC advertising, a sector primarily dominated by Love Holidays. Unlike its major competitor, On the Beach, Love has not invested in above-the-line brand-building advertising, potentially making them vulnerable as Easyjet enter this space.

While it is currently unclear who stands to lose, logic dictates that Easyjet Holidays is set for rapid expansion and will be the largest UK tour operator within 5 years.

So, whether the future is bright or not, it’s likely to be Orange.

Having worked in travel all my working life, I have seen first-hand the benefits that traveling brings in terms of global understanding and tolerance. However, I have also become one of a growing number of “Green Activists” looking at how we can save the planet by slowing and eventually stopping Global Warming. In this role, I regularly hear fellow activists demanding that people fly less.

However, travel only represents 12% of an individual’s carbon emission and there are many other sources of Co2 emissions that if dealt with would have a much bigger impact.

 The travel sector does need to openly admit it will not be carbon neutral by 2030 or any time soon and address what it does to compensate for this. If it doesn’t “flying” could quickly become the equivalent of smoking and be seen by younger generations as a polluting/anti-social behavior.

A simple solution might be “compulsory carbon offsetting” for every flight taken, with the funds generated used to drive carbon removal programs around the world.

 Global warming can be reduced, by removing carbon from the atmosphere anywhere in the world, which is why I have invested/donated substantial funds to help develop modular hemp farming containers. These can be dropped into Africa to create hemp farms which are 4 times more effective per acre at extracting Co2 compared to planting trees and can be powered by generators that burn the oil created from crushing hemp so that it can create a material this is used for making clothing or building. These generators also power lighting and water irrigation, which allows food crops to be grown, making it a win for the local and global communities at the same time.

 The bottom line is that all extraction schemes need funding, and the best route is via “taxation” on polluting activities.  

 However, can we trust the UK Government not just to pocket any “carbon offsetting” tax in the same way it pockets APD tax, with no explanation on how it is spent or why it is even charged, apart from that it’s an easy stealth tax.

 The UK Travel Industry needs to admit it’s a polluter and pay its taxes, whilst ensuring they are well spent on reducing carbon emissions. If this cannot be done via our government, then the major airlines need to join forces and operate a compulsory carbon offsetting program themselves.

Travel also needs to widen the debate and focus customers’ minds on the bigger Co2 issues, which if dealt with would allow them to continue to travel with a clear conscience.

Unplugging, the petrol pump and buying an EV would cut 29% of an individual’s Co2 emissions, whilst reducing car running costs by 66%. Switching household heating from gas to electric or ground source heating, would rapidly eat into the 41% of emissions created by running our houses, but is less likely as electric heating is currently 4 times more expensive than gas.

However, what’s the point of moving the UK population to clean EV cars and electric heating, if they are powered by expensive and “dirty” electricity?

 The UK electricity board is one of the country’s biggest polluters, with 50% of electricity being generated by burning gas or other fossil fuels. The quickest solution to stopping this is a massive investment in nuclear power, but the Government is still dithering about funding the £500m required to start the process of deploying 20-30 Rolls-Royce “Small Modular Reactors” (SMRs). These will boost nuclear power back to the 25% share of production it used to be in the 1990s and give more time to develop other clean power projects such as solar and wind.

Action is needed now but if we think we have issues with travel being ignored by the government, try becoming part of the nuclear electricity sector!

 Travel will always be a force for good, but it needs to clean up its image via offsetting in the short term and less polluting fuels or power sources such as hydrogen in the longer term.

 In my opinion, we do not need to stop flying to save the planet, but we do need to compensate for the miles we fly to enjoy our holidays and drive change elsewhere.

Let’s act now to protect the industry we love.

Covid-19 created a generational change in our acceptance and use of video conferencing technology in both our business and social lives.

My weekly travel from Manchester to London has long gone, with most of my days now spent in my garden “office pod”, where in between Zoom or Team calls with colleagues or potential business leads, I type away on my computer.

The location we work from has changed for many people, with blended working between home and office becoming the norm. This has unfortunately impacted many of our high streets, with reduced walk-in traffic being reported by many high street agents.

Far from seeing this as the latest reason to predict the “Death of the High Street”, I see it as a driver that will force Highstreet agents to evolve their working practices to incorporate appointment-based video conferencing.

At homeworking business TSN, we have been working with video experts “U-SEE Technologies” to develop a bespoke video platform, that allows homeworkers to market their services via email, social media, or google “pulse” advertising to their local communities. The inquiries generated can be handled face to face or by phone, but increasingly customers are making appointments via the diary functions for Video conference calls.  

Agents can pre-prepare for these video calls, storing documents, videos, quotes, or even links to websites, for ease of use. These aspects of the platform are invisible to customers and allow a much slicker/more professional fully branded service compared to the mass market video platforms.

Incorporating these same tools into shop-based selling could seamlessly extend opening hours and drive higher conversion by offering greater convenience.

A simple bold poster in the window promoting this always-open “Video Appointment” system, would allow the shop to generate inquiries from customers even when it’s shut. A QR code on the poster, when scanned by the customer’s phone opens the shop meeting diary and asks the customer some simple qualifying questions. Date and times are then selected, giving the customer the convenience of a face-to-face consultation from the comfort of their home.

Some travel businesses already operate “out of hours” call center support to extend the opening hours of their shops, but there is always a natural conflict as shop staff don’t want the leads, they generate, converted by other staff who take a large cut of their commissions. It would be interesting to see if these shop staff will be willing to jump on evening video appointments to complete bookings or generate fresh leads. A key advantage is that unlike call centers there is no need to spend idle hours waiting around as only pre-arranged and diarised calls need to be handled, making any time allocated to this work highly productive.

The U-SEE diary function is highly tailorable and links into your personal diary, behind the scenes, so that business appointment hours are automatically blocked, when kid pick up/drop offs or other social events pop into the diary.

There are numerous product extensions that will create Travel Video 2.0, such as QR stickers on brochures or specific posters/social posts promoting destination or product expertise e.g., New York Breaks, Safari’s, and Adventure holidays. However, partnerships with high-traffic locations such as train stations, and supermarkets to promote “face-to-face” holiday booking via video may be the big volume drivers.

Seeing a customer’s reaction and adjusting sales pitches on the fly, drives higher conversions. Combining this with appointment-based selling, reduces wasted time and boosts convenience for both the customer and the travel agent.

PS. If anybody wants to hear more from U-SEE simple message and I’ll send an appointment link!

Hotels and airlines for years have successfully operated “loyalty” programs, which aim to lock frequent travelers into using their hotels via points-based schemes that offer room upgrades or free stays for family leisure trips.

These schemes are more successful the bigger the chain of hotels or airline networks involved and tend to focus on business travelers, where the company is picking up the tab.

Can individual hotels or beach hotel chains use these types of schemes?

A key weakness is the low frequency of customer stays, with even loyal holidaymakers only traveling to the hotel once a year for their 7-night beach holiday. This makes “points” schemes irrelevant for this market of customers, forcing them to look for other ideas to drive loyalty and direct bookings.

“Direct Bookings” have become a bigger focus for beach hotels in recent years, because of the evolution of the market away from “vertically integrated” tour operators who used to promote them via printed brochures and often “guaranteed” their rooms with big up-front cash payments. Today the UK OTA and low-cost carrier tour operators’ sites allow few opportunities for hotels to stand out and promote the refurbished, high-quality offerings they have invested so heavily in.

At the same time, the dominant hotel only OTA Booking.com has used its size and power to impose stringent price parity rules, which effectively means hotels cannot offer lower prices to direct bookers.

This neutralises the most obvious route for driving direct bookings, which is cheaper “Non-Refundable” room rates, where customers pay in full on booking via hotel direct sites, boosting cash flows and creating firm bookings.

Booking.com and other OTAs use their scale to demand access to these same rates even though in most cases they don’t pass on the cash for these “Non-refundable” rates any earlier.

This price parity demand means customers can get the same price via the booking.com website or app, which they use regularly for domestic and international travel. This frequency of use builds a level of brand loyalty and convenience, as booking.com holds all personal details and cards. This makes it a much quicker and simpler booking process, that a beach hotel will never be able to match.

At the same time, Booking.com advertises above hotels in Google, when customers search for a hotel name, ensuring that customers know they can book via this well-known brand at the same price as the hotel direct.

At HDC (Hotel Distribution Consultancy) we advise hotels to look at ways they can give their direct booking customers advantages that don’t breach these price guarantees, as booking.com distribution is key and needs to be protected.

We offer a portfolio of recommendations about how to focus on customer “needs” during their holiday stay to create a “Priority Access” schemes, which are only available to Direct Bookings.

These “Priority Access” schemes can be promoted to customers on the hotels’ websites as a reason to book direct and be rewarded during their upcoming stay, rather than having to collect points they can only use on future trips.

These schemes offer a workaround OTA “price parity” rules, to reward direct booking. This drives healthy early cash flows and greatly reduces the 30% cancellation levels delivered by the booking.com model, which under-commits customers as they can often cancel up to 24 hours before arrival free of charge.

Taking control of their own destiny via direct bookings must be a key focus for beach hotels.

Hotels are an “asset-heavy” business sector that has high fixed costs but makes substantial profits when they are full.

This makes them dependent on high room occupancies and often creates a competitive fight based primarily on price and strength of distribution, between similar hotels located on the same stretch of sandy beach in a holiday destination.

During the age of “vertically integrated,” tour operators and hotels often did “strategic” long-term deals, where tour operators in exchange for much lower room rates guaranteed the entire hotel.  Hotels that did not have guarantees, still relied on these tour operators to feature their hotels in their brochures and deliver customers to them.

Few beach hotels, ever invested in building their own “brands” or invested in direct marketing in major source markets like the UK. This left them at the mercy of their tour operator partners, who often paid them a massive 90 days after customers return home or not at all if they collapsed (Thomas Cook). How many other business sectors would accept these unfavorable payment terms?

The advent of the internet destroyed the stranglehold of access to holidaymakers that tour operators held via their 60% control of high street travel agency shops. This combined with the growth of low-cost carriers, allowed the “Dynamic Packaging” revolution to occur, which created today’s online travel agents (OTA’s) such as On the Beach and Love Holidays who between them carry 3.5m passengers. These businesses are “asset light” and rarely contract any hotels on a guaranteed basis, making hotels compete based on price.

The hotel-only giant Booking.com operates on the same basis and pre-Covid 19 was used in conjunction with Skyscanner or google to access flights,  by millions of customers to DIY their own dynamic packages. This market is not measured by ATOL but probably accounts for 5m plus holidays.

Tui remains the largest UK ATOL Holder at 5.36m passengers, but the debt mountain it incurred during the Covid-19 crisis, has destroyed its ability to create “differentiated” and exclusive hotels by guaranteeing up to 80% of its hotel stock. This has left many beach hotels for the first time in generations without any guarantees and desperate for new routes to attract customers.

The rapidly expanding “in-house” tour operations of the low-cost carriers have been the clear market winners over the last 5 years, with Jet2 Holidays taking most of the collapsed Thomas Cook market share and being set to continue to eat into Tui share as it slowly declines, having lost its differentiated hotel stock.

Easyjet holidays also needs to expand rapidly to key city investors happy and will therefore need to take share from Tui or OTA’s, as it’s less likely to take share from the established Jet2 Holidays.

Currently, few of these players see the benefit of “guaranteeing” hotel stock, outweighing the increased commercial risk, whilst operating in a UK holiday market where demand remains uncertain due to the energy crisis, rampant inflation, and rapidly escalating mortgage costs.

Therefore, hotels need to take their destiny in their own hands and increase their consumer direct distribution, but many lack the required expertise.

Reviewing a range of hotel sites ahead of the upcoming World Travel Market gathering at the London Excel center, I found a common theme.

1.    No option to book in £’s sterling. This immediately loses 30% of sales to players like Booking.com which are just one click away.

2.    No flights are offered. Customers can’t swim to a hotel and need flights. 40% of potential sales will be lost if a hotel site does not offer flights.

3.    UK phone numbers. The simplest way to offer “package holidays” including flights is to partner with a UK travel agency to use their ATOL licenses and staff to book packages. However, hardly any hotel sites offer this, and the only one that did have a UK telephone number answered it with a 5-minute pre-recorded message in Spanish!!

4.    Dominance of Google Brand terms. Hotels often secure the top spots for SEO-based google search’s for their brand name, but let competitors such as Booking.com pinch high-quality leads by advertising above them.

Direct marketing in other countries, is not a key skill set of many hotels as historically they have never had to do it.  

Finding local source market partners willing to be paid on a booking-delivered basis needs to be a high priority.  These partners should understand how to market on Google, Instagram, or traditional media, to create strong above-the-line campaigns, that can be converted into bookings via the hotel’s own booking sites.

Direct bookings after advertising costs may or may not deliver higher prices for a hotel room, but they 100% deliver cash earlier and in the current economic environment “Cash in King”

As an investor in the UK’s largest music-based tour operator Sound Travel, which packages event tickets with hotel accommodation, I was invited this weekend to experience the ABBA Voyage virtual concert in London’s former Olympic Park in Stratford.

To say I was blown away, by the sophistication of this “virtual experience”, with completely life-like ABBA Avatars, interwoven with slick video production and a great sound system, would be an understatement.

 This was my first experience of “Crowd-based” virtual reality, where instead of being fitted via a virtual reality headset, that isolates you from the real world, you’re immersed into a concert crowd experiencing the same show. Like any “real” concert, the feel-good factor of the crowd around you, dancing and singing along, makes the experience magical and something well worthwhile travelling for.

 As a regular festival goer, I have often enjoyed seeing bands from my youth such as the Rolling Stones, New Order or even new romantic favourites like the Human League or Duran Duran. Often classic music stands the test of time, but do we really want to watch a bunch of decrepit 60-year-old rockers strutting their stuff? Often, this is a painful reminder of our own ageing process.

 How much better to see a live concert from their prime and dress up in those clothes of yesteryear!

 This is what the virtual reality technology behind the ABBA Voyager experience, can deliver at a touch of a button, with no fear of artist wear and tear or illness. Shows can be scheduled every day of the week and twice a day on weekends, to sell-out crowds of 3,000 people, with no overcrowding or long queues at the tube station on the way home. At £85 per ticket, the shows are clearly a major money spinner at £250k per show or £115 million per year giving an estimated 2-year payback on the £140m production costs. This relatively high set-up cost is expected to fall dramatically for subsequent productions, as ABBA Voyage really was a groundbreaker using lots of new techniques.

 Next year the ABBA Voyage show will go to New York either as a new production on top of London or with the temporary stadium being lifted and shifted.

 I’m happy to say that this show has also been a big earner for Sound Travel, who package weekend breaks for both domestic and increasingly international source markets. However, I think this is just the tip of the iceberg, with destinations like Dubai, Qatar and Saudi Arabia likely to incorporate similar music-based events into their tourism armoury, to provide a much closer alternative to Las Vegas for many Europeans.

 Experiential travel has already enjoyed rapid growth with the UK public booking city breaks based on attending concerts by their favourite bands or travelling to an ever-expanding range of UK-based festivals. How many more would travel to see the Beatles reunited and playing concerts in their prime?

 Song royalties and artist participation are never a given and would come at a considerable cost, but just as Queen’s blockbuster “Bohemian Rhapsody” was quickly followed by Elton John’s “Rocket Man”, similar projects seem inevitable.

 Tourism chiefs need to take a good look at what is happening in the London streets of Strafford and consider using similar experiences as one of the foundations of modernising existing or developing new tourism destinations.

 Few holiday experiences can generate such a feel-good, wow factor, that a great concert can, so adding this to a holiday mix of sun, beach and fun could be a real winner.

 Forget virtual reality as a “singular” immersive experience and embrace an experience that can unite you with your family, friends and often strangers from the crowd around you.

Working with Trending Travel has opened my eyes to the promotional power of Instagram and influencers.

 Like most social media channels, Instagram is dominated by “individuals”, who have millions of followers interested in the posts they share. A few business-like Trending Travel (Trending), who currently have over 500,000 followers on Instagram and Tik Tok, are followed because their content “Inspires”, but it’s important not to be overly commercial, as this is likely to turn off its social media-centric audience.

 Trending Travel has already proven its power to partners as a “Brand Awareness” alternative to mainstream media such as TV. One example was the launch of Virgin Voyages, where Trending hosted 29 influencers who created posts and video reels, which generated a combined viewing of 16 million views within a 10-day period. At the same time, Trending Travel’s own film crew created a huge range of professional content to be used by both Trending and Virgin across all its media channels to create booking demand.

 Keith Herman the CEO of Trending compares his business to a fishing “Trawler” with “influencer nets” that massively expand its consumer reach to “Inspire” customers to travel to a destination, hotel, or cruise.

 Its Instagram age demographic is between 18-35, but with a surprisingly high holiday spending budget, with many travelling to long-haul destinations such as the Maldives and Dubai, as well as more traditional short-haul beach destinations.

 Trending’s position at the “Inspiration” top of the booking funnel carry’s both positives and negatives. The obvious proven positive is that its brand advertising model can easily be measured by the number of views it delivers. However, the negative is that the demand it generates spins off to multiple channels, from online to traditional high-street shops and now homeworkers.

 This is the next stage of the booking process is to “research and compare” prices for the hotel or destination promoted usually via google, rather than going directly to “book”. Hence, historically around 15% of traffic was captured by Trending Travels dynamic packaging site and converted into bookings, but 85% was lost to other travel providers.

 The obvious solution was to team up with a business operating in the stage of the booking funnel directly below inspiration, which is “Comparison”. Trending, therefore, selected the UK’s largest holiday comparison player Icelolly Travel Group, to team up with to create its new “Inspire and Compare” booking funnel.

 Trending will continue to take groups of influencers to destinations, such as Tenerife to create “Inspiration” to travel there, but each post will contain a “Compare prices” link, that goes directly to Icelolly’s Tenerife results page with the featured hotel at the top of the page. At this stage the customer can not only compare prices for that hotel from all the major travel business such as Easyjet Holidays, Jet2 holidays or On the Beach to name a few, for the dates they want to travel or explore cheaper hotel options in the same destination.

 If the customer does want to book, they are seamlessly handed off by Icelolly to the highly optimised “Booking” sites of its partners, therefore creating a full end-to-end route from “Inspiration” to “Booking”.

 This new booking funnel is exciting as it could offer customers a streamlined and quicker route to the best-priced holidays in a destination they have been inspired to travel to, but also deals with the large number of customers who are just inspired to go on holiday and are happy to go anywhere.

 From a travel company’s point of view, it’s a brand-new booking funnel outside of the control of Google that delivers highly qualified leads. Instagram is no longer a dream creator, it’s a booking delivery path.

 That’s something I think may get travel companies’ attention!

A few weeks ago, I was highly pessimistic about travel’s outlook for Summer 23, but the Governments £100 billion energy price cap intervention, will make a massive difference to travel prospects in the short term.

 UK households saw a 54% increase in energy bills on the 1st of April as the energy cap for an average house was raised to £1,971 per annum and faced a further 80% increase on the 1st of Oct, and yet another 52% increase to £5,549 on Jan 1st 2022, just as travel hoped to move into its peak holiday booking period.

 Prior to the energy cap’s introduction, a massive 8.9m of the UK’s population was predicted to move into fuel poverty where they must make decisions between “eating and heating”. A total of 25m households were forecast to have virtually all their disposable income for non-essential luxuries eroded a few weeks ago, I was highly pessimistic about travels outlook for Summer 23, but the Governments £100 billion energy price cap intervention, will make a massive difference to travels prospects in the short term. 

UK households saw a 54% increase in energy bills on the 1st of April as the energy cap for an average house was raised to £1,971 per annum and faced a further 80% increase on the 1st of Oct, and yet another 52% increase to £5,549 on Jan 1st 2022, just as travel hoped to move into its peak holiday booking period.

Prior to the energy cap’s introduction, a massive 8.9m of the UK’s population were predicted to move into fuel poverty where they must make decisions between “eating and heating”. A total of 25m households were forecast to have virtually all their disposable income for non-essential luxuries eroded to zero, with most quickly running down any savings they had.

I love the optimism of the travel industry, but you’d have to be a complete ostrich with your head in the sand not to realise that the travel sector, like the hospitality and hairdressing industries, were all heading towards an “Armageddon” situation, given the weakness of businesses balance sheets post the massive Covid-19 disruption, that we are only just emerging from.

The Government’s intervention is massively beneficial to the travel sector, as many customers will still have short-term disposable income to spend on a long overdue overseas holiday before the true impact of the recession is felt in the UK and therefore this should save the Summer 23 early booking market.

However, the industry must still remember that fuel prices have doubled in the last year, which will greatly impact the winter “second” holiday market as two holidays a year, become a luxury that only the “haves” can afford.  

Whether “Armageddon” has been avoided or just postponed, really depends on how effective the Government is in the next 18 months in terms of resolving the energy crisis, via either ramping up gas exploration, nuclear power, or solar/wind generation, as a £50billion a year price cap is simply not sustainable. 

Inflation is like a stealth tax that most UK households are aware of, but assume they can counterbalance with wage demands. It, therefore, has a much slower impact than interest rate hikes, which potentially make mortgages unaffordable.

Unfortunately, inflation is currently at 10.9% and the most effective historically control has been increasing interest rates, which immediately filter into mortgage rate increases. However, the Government needs to boost the economic output, which means that it is unlikely to allow interest rates will rise above 5-6% in the next few years, as this could easily create a house price collapse and massively impact consumer confidence.

The travel industry’s short-term challenge will be passing on the substantial holiday price rises required to offset dramatically higher aviation fuel prices, which are further exaggerated as aviation fuel is purchased in dollars, at a time when the pound is at an all-time low of 1.15. This combined with the hotel price increases as they seek to recover increased operating costs is expected to cause a 15% year-on-year price inflation in holidays.

As previously outlined in other blogs, this will create a market divided between early booking “haves” and a dramatically weaker late booking market where the “have nots”, simply cannot afford to grab those last-minute bargains.

The jury may be out about the impact of the energy crisis on travel, but caution is a sensible short-term option. Here are my personal top tips, for companies selling short-haul beach holidays, as part of their mix.

• Stop flogging a “Dead Horse”. If your business has a debt mountain that is going to take more than 3 years to pay off, consider “popping” the Company and walking away, or if possible, launch a “Phoenix from the Ashes”, but make sure you protect customer cash as a priority if this is your intention. I know from personal painful experience, that at times, soldiering on is not the best option.

• Cut overheads. 

• o Location. Highstreet properties with a rateable value of £15k or less, now do not pay business rates, dramatically reducing operating costs. Few of these shops are on mainstream high streets and therefore require local community outreach and social media campaigns to drive sufficient traffic either in person or by phone.  
• o Staff costs. Covid-19 removed most of the “fat” from travel companies, so any further cuts will be highly painful and personal. It’s time to let those senior people go and be prepared to roll up their sleeves. get involved and invest in junior staff to make up the deficit.
• o Risk. Switch to selling third-party packages, which carry less re-book and ATOL risk, at a time when further travel disruption is likely.

• Invest in community outreach. Avoid the easy, but expensive Google route and invest in low-cost branding opportunities in local communities’ projects such as sponsoring the kits of junior rugby or football teams. Don’t be afraid to market directly to potential customers via these groups “WhatsApp groups”. Charity starts at home, but so does local marketing and if you’re smart both are tax deductible.

• Incorporate homeworking into your business model. This allows both lower salaries and increased opening hours.

• Increase ancillary income. Every business needs to “wring out” every pound of income from each lead generated. 

The future may not be bright, but as in any crisis., those who evolve and adapt will be the winners. Don’t put your head in the sand and instead create a prosperity plan, that acknowledges and accepts the risks the future poses. Opportunity knocks!

When low-cost carriers entered the travel scene in the mid-1990s, they focused on operational efficiency by flying high-frequency short durations city routes. However, as they grew, they realised that it was easier to maximise aircraft flight hours by incorporating beach holiday destinations, such as the Canaries with their longer flight durations into their programs.

This led to the dynamic packaging revolution and the creation of low-cost tour operations like Jet2 Holidays, which over the last 15 years has destroyed the traditional charter-based tour operation model, with only a weakened Tui Holidays left remaining.

Low-cost carrier’s yield models diametrically opposed those of charter operations, with seats discounted early to boost load factors, rather than dumped at the last minute. However, in recent years it’s the “hook and add” yield model that really dominates low-cost flight sales.

Initially, Low-cost carriers introduced a “First come seating process” to force customers to arrive early at their low-cost but remote departure gates. However, they quickly realised that they could charge for the privilege and the first “Add on” was created in the form of paid-for “Priority/Speedy boarding pass”.

As airline booking technology advanced, this morphed into charging differential prices for different seats on the aircraft and today this is a highly fluid algorithm, based on historic demand for those seats on a route-by-route basis.

The post-Covid-19 restart issues of airports and the difficulty of checking hold luggage, has been a massive bonanza for airlines like Ryanair, who not only charge £30 a head to book front row quick exit seats but add a further £26-£30 to book priority boarding, which allows 2 items of luggage which is often sufficient for a short holiday.

Recent industry statistics show that flight “Extras” now represent 40% or more of the average flight fare charged by some low-cost carriers.

Price comparison sites and Google, make it easy for customers to click between sites to compare the seat prices of different airlines. However, research shows that 80% of customers only compare the lead flight prices of airlines, assuming most airlines charge the same for pre-booked seats, luggage, and speedy boarding extras. They are clearly wrong and Ryanair seems to have mastered the low-price “hook and add” methodology better than most.

To be fair, I am not aware of any customers complaining about this “Add what you need approach” and not surprisingly other travel sectors are now joining in.

Airports now charge a £5.00 drop-off and pick-up fee to access the airport by taxi or car, whilst charging customers to bypass the worst of their inefficiencies with a £5.00 fast track security or passport control fee. The income from these fees must now be close to overtaking the landing fees they charge to airlines, but customers have accepted it.

Tour operators have been relatively slow to adapt this extra’s model, but many years ago did remove “transfers” from the basic holiday price, on the basis that it allowed customers a choice of continuing to be herded onto transfer buses or to book private taxi transfers.

They also operate their own price tricks such as “Free kids”. In the small print, it says that these do not count towards “occupancy” in self-catering rooms, allowing them to in effectively recover the cost of the accommodation used by the “Free Kids”.

Hotels have always charged different amounts for sea views or larger rooms, but have now joined the game by putting bookable double sun beds and “Cabanas”, in the best spots by the pool. You could soon find a booking tool in hotel rooms, that saves the 7 am alarm call to get your towel on a lounger, by making them all bookable for a fee the night before.

So, what could be next in this “Hook and add” game?

Could airlines sell standard weight tickets and introduce “Super Scales” at checking to measure not just the weight of the luggage, but the size of the humans they are transporting?

If Michael O’Leary is willing to consider charging £1.00 to use the toilets on board his flights, he could easily charge a “Super Size Supplement” to cover the fuel cost of flying larger customers!

The hook and add-yield model will only continue to get more sophisticated as it will be a brave airline that bucks the trend and reverts to all-inclusive flight pricing.

However, in the holiday sector, Jet2 Holidays have bucked the trend by including 23kg of luggage and transfers as part of their ultimate holiday package, so it’s clear that even in this price-conscious sector product differentiation can allow a premium to be charged.

Who’s right and who’s wrong will only emerge over time, but even though I hate to admit it, so far Ryanair does seem to be a consistent winner.