State of the Travel Industry During 2002

23rd Dec 2002

As the end of the current year approaches the majority of those who work in the travel industry will be hoping that the New Year brings a major turn-around across the travel market. 2002 was a turbulent year for the sector, and it is predicted that actions such as cuts in spending and improvements in service are needed to allow the industry to steadily improve.

Many factors contributed to the down turn in travel and tourism across the globe including the World Cup, the Queens Jubilee and the continued war against terror. Individuals are wary of travel as a process and the safety levels that surround it. With renewed calls to establish armed Marshals on certain carrier`s aircraft, and the recent terrorist attacks in Africa, consumer confidence is at a low.

Gary David of Cadogen Holidays understands that consumers are not going into the travel agencies as frequently as they used to; `I`ve heard that people are spending a third more this Christmas, but certainly not on travel`. Mr. David believes that the only way for agents to survive is by cutting back on costs; `With the prospect of war on the horizon agents need to trim their expenditures - there are really tough times ahead`.

One of the biggest changes in consumer habits is the fact that more and more people are turning to the internet to research and book their holidays/vacations. Mr. David continues; `People are competent on the Internet, they enjoy booking their holidays themselves`. A report carried out by the Travel Industry Association of America (TIA
) observed that over half of its 2,300 members noted increases in usage of their websites. The TIA also highlighted that three quarters of its associates saw a clear shift in holiday habits. According to the report, more individuals are holidaying closer to home with travel hotspots including Central and Latin America and the Caribbean. There was also a higher incident rate of last minute booking.

Dr Suzanne Cook, Senior Vice President of the TIA, suggests; `The current economic situation, combined with a sluggish travel recovery and decrease in traveler spending has forced the industry to employ various new strategies`. President of Howard Johnson, the hoteliers who have focused attention on the family travel market, aiming to provide a `home from home` across its 497 outlets, agrees; `This has been one of the toughest years that the industry has had to face. It`s a tough fight to keep consumers, but it is one we are ready to fight`.


Chris Kroeger, Sabre`s
Senior Vice President - EMEA region feels that 2003 will not be any easier on companies; `2002 was a challenging year for the travel industry. While we expect to see an improved revenue picture in 2003 for each of our four businesses - Travel Marketing and Distribution, Airline solutions, GetThere and Travelocity - all indications are that the business environment will be every bit as challenging as 2002`.

Mr. Kroeger believes that to see improvements in 2003 it is important to increase customer relations; `The challenge for 2003 is to help our supplier customers realize even greater value from their relationship with Sabre, while enhancing our travel agency customers ability to prosper is an increasingly competitive environment`.

British Airways
reiterated the fact that 2003 doesn’t look set to be any easier on the sector. A spokesman commented; ‘Trading conditions in 2003 look to be very similar to those of 2002. There is a tough year ahead but BA are in very good shape and will get through it’.

One company that seems to have weathered the pressures of the economic slow down is Emirates
. At a time when other companies were struggling, Emirates managed a 140% profit increase. Vic Sheppard, Manager of UK Sales and Marketing for Emirates, believes the reason behind this was; `Emirates has been cushioned from the effects of September the 11th because we do not operate in the US. We have benefited from our hub in Dubai`.

The United Kingdom also reported positive travel figures with visitors from North America up to 320,000 from 257,000 in Oct 2001. The amount of visitors from Western Europe was also up by 8% from 2000. However, visitor spend was still down by 13%. (Figures were correlated from 2000 because of the terrorist attacks of 2001).

In response to the current climate the Tourism Society is holding an event for travel industry professionals, raising prospects for the industry during 2003. The evening, being held on Thursday the 9th of January, will include guest speakers, open debate, and an opportunity to network over refreshments.
Here’s to a prosperous New Year for everybody involved in the travel business.



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