UK visitors up, forward bookings down

UK tourism is reporting sluggish forward bookings with a sales decline in February of 0.5 percent, even though visitor arrivals were up by 1.6 percent for that month.
“This masks a wide disparity in results reported by our members, with some recording solid growth and others a sharp decline,” explained Stephen Dowd Chief Executive of UK Inbound.

Other than hotels reporting robust business travel figures the reasons for these differences are not clear from the data available. However, the poor forward bookings figures would indicate that lack of consumer confidence is the most likely culprit.

In the largest market, the USA, that consumer confidence has taken a battering over the last two years.

The US trade and budget deficits have continued to grow to record levels despite the Federal Reserve raising interest rates from 1% to 4.75% in just 20 months. This has severely dampened demand for overseas travel as consumers worry about job security and the cost of borrowing.

As expected oil prices have remained at near record levels and this led one airline to increase fuel supplements with the statement “we have now had to hedge at much higher price levels”; a tacit admission that the current level of supplements are here to stay. Which begs the question - Why can’t they, and indeed all taxes, fees and charges, be included in the ticket price? In any event high fuel costs are eroding the benefits of the liberalisation of air travel in recent years.

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The UK remains a must see destination but it is clear that the cost of a visit here, distorted by high taxation, is becoming a reason to delay or defer the trip for many of our potential long haul customers and shortening the length of stay for our short haul visitors.

With over a third of the UK now living alone we asked our members this month if they had experienced an increase in demand for singles holidays in the UK. Although no one reported a reduction in demand only 22% had seen an increase so far. It is likely that many single visitors will wish to travel independently but as this sector grows there is sure to be an increase in demand for organised singles vacations in the UK.
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