Advantage travel agents have seen a 13% increase in bookings and a 25% rise in revenue so far this year, but with clients booking shorter holidays and opting for more all-inclusive deals there is concern that the cost- of-living crisis is starting to bite.
While business is still brisk, with bookings for summer 2024 up 67%, almost three-quarters (72%) of Advantage members say they’re worried price rises will hit consumer confidence.
“We are seeing price increases and that concerns our members because will [the market] outprice itself?” said Chief Executive Julia Lo Bue-Said. “Right now, consumers are willing to pay the price of a holiday….but will the bubble burst? Right now, we are not seeing that.”
However, 64% of Advantage members say price increases are having a ‘slight’ impact on the growth of their businesses. One of the indications that consumers are starting to cut back is a drop in the average length of stay to six nights.
“Consumers don’t want to trade down so they are maintaining the quality and decreasing the length of stay,” said Chief Commercial Officer Kelly Cookes, although she said the average length is likely to increase to more than eight nights by the end of the year.
Advantage believes the cost-of-living crisis is also behind a significant rise in all-inclusive bookings, which account for 50% of all holidays booked so far for summer ’24, compared to 31% this summer. “This is really the way we are seeing people manage their costs,” added Kelly.
This summer, customers have also booked much later than usual, with half of all holidays bought within 12 weeks of travel compared to 35% to 40% in other years, which Kelly said was a further indication that consumers are ‘waiting to see what their finances are like’ before committing to a holiday.
However, the lates market was boosted by poor weather in the UK earlier in the summer, said Advantage. “The wet weather has driven a lates market unlike we have ever seen,” added Julia.
Bookings for October half-term are up 16% year-on-year, with city breaks coming back strongly and accounting for one in 10 bookings for the school holiday period. Rome, Krakow and Prague are proving the most popular, added Advantage.
Christmas bookings are 60% up compared to last year, with Canaries the top seller and Australia the biggest long-haul destination.
For next summer, 20% of bookings are long-haul, with the US taking a third and the Far East the second most popular region. “Early indications are that the Far East is going to have a really good year in 2024,” added Kelly.