Sunday, 13 December 2015

Holiday prices: questions remain

Llewyn Peninsula, North Wales - will holidaymakers stay closer to home

How will holiday prices move in response to recent terror attacks? There seems little doubt that in the immediate term capacity will be squeezed in the relatively few short haul sunshine destinations still perceived as safe, notably the Canary Islands. As I have already noted on this site, that’s likely to make last minute bargains harder to come by. According to the major tour operator TUI travellers are turning to long haul destinations such as the Cape Verde islands following the Sharm el Sheikh crisis. The bounce back in Greece looks likely to gather momentum next summer. But the big question remains whether general nervousness will depress the overall market beyond Christmas and into the New Year, persuading consumers to stay close to home and producing a downturn in bookings greater than the reduction in capacity created by the demise of Tunisia and the grounding of flights to Sharm el Sheikh. Some tour operators reported a sharp decline in bookings in the immediate aftermath of the Paris atrocities. It’s not possible to look at travel from the UK in isolation. Statistics show that sales of airline tickets from the US to Paris have plummeted. They were reported to be down 28% last week compared with the same period last year – though bookings to the rest of Europe have held up fairly well.  The International Air Transport Association (IATA), whose membership includes the world’s major airlines, reports traffic to Europe from Asia is down. At the same time it says air fares worldwide fell by an average of 5% n he first eight months of this year. Low aviation fuel prices have been the main cause. According to Tony Tyler, director general and CEO of the association, fares are still “trending downwards” (the statistics also suggest that  European passengers may be less likely to reap the benefit than those in other regions). Will that trend be accelerated by a reluctance to fly in the face of terror. It's just one more unknown. But whatever happens in the next few months history shows that tourism is remarkable resilient. Eventually, even from the greatest adversity, it recovers.

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