— Turkey most preferred destination for Brits, Cyprus still popular —
The first shots of a massive new holiday price war were fired including up to 20% off some trips for next summer to get more Britons abroad with Turkey set to become the most popular destination for British tourists in 2010.
The price war has been kicked off by travel giant Thomas Cook and the UK's biggest chain of independent agents, The Co-operative Travel.
Trevor Davis, director of retail distribution at Co-operative Travel, said: "As the holiday sector recovers, the battle for bookers will intensify, with firms seeking to increase their market share after a challenging 12 months."
Davies said bookings for the top 20 summer 2010 destinations have risen sharply in the past three months. The Turkish resort of Dalaman has seen an 82% increase in bookings and has taken over from Majorca as the No. 1 destination in 2010.
Majorca is now in second place, with Orlando, Florida, third, the Spanish Costa Blanca fourth and the Greek island of Crete fifth.
Other destinations high on the booking list include Bodrum in Turkey, Ibiza and Larnaca.
Thomas Cook predicted Turkey will be the “in” place for 2010, with Egypt, Majorca, Tenerife and Cyprus all doing well too.
But even the cost for Turkey is rising. “It’s not cheap anymore,” said one travel industry expert.
REVENUE UNDER PRESSURE
The implications of the price war now being waged in the UK for Cyprus is particularly significant, considering that the UK supplies more than 50% of tourists to the island and generates just under half of all foreign exchange revenue from tourism.
Tourism arrivals up to November 2009 fell 11% year-on-year to 2.07 mln, with the bulk of the decline attributed to a steep decline from the UK.
Tourism arrivals for all of 2009 are set to register a 12% decline to 2.11 mln from 2.4 mln arrivals in 2008. Tourism revenue, however, is set to register a 15% decline in 2009 to around EUR 1.5 bln from EUR 1.79 bln in 2008.
In the event that UK travel giants secure a 20% decline in prices from Cypriot hoteliers to maintain bookings at 2009 levels, then overall tourism revenue will record another 15% decline in 2010, forcing more hoteliers to close shop with disastrous consequences for the Cyprus economy.
CYPRUS STILL EXPENSIVE
Cyprus continues to be an expensive destination, so all this is left to do is to improve the product and promote it hard, Noel Josephides of Sunvil Travel and former chairman of the association of independent tour operators (AITO) told the Financial Mirror.
“There are no new ideas and the incentives announced by the government are not proving effective,” he said, adding that if Cyprus really wants to make an impression it should consider abolishing at least half or all of the GBP 85-95 airport taxes charged per passenger.
“Such measures will make a huge difference on a package,” he said. “Cyprus is very expensive, the hospitable native waiters and receptionists have gone. This is a good time to clean up whatever is wrong in Cyprus and improve on the infrastructure.”
INCENTIVES
Incentives offered in the U.K. include free child places and packages with a fortnight away for the price of an 11-night trip, which corresponds to a 20% discount, as the industry desperately tries to improve on an awful 2009 for holidays.
Celebrity couple Jamie and Louise Redknapp will star in adverts re-introducing the slogan “Don't just book it, Thomas Cook it” featuring special deals.
Other offers include a number of free child places and free meals for kids in resorts, special packages for single parent families and others.
The Co-op, meanwhile, launched its own offers for next summer including straight 20% discounts, free child places and deposits of just GBP50 to give people time to pay.
Rivals such as Thomson along with the individual airlines are expected to join in the price war in the hope of turning around 2009 figures.
Although the annual total is not known yet, it is estimated that the number of Britons going abroad for leisure – as opposed to business travel – fell around 14% in 2009.
Travel companies had planned for some of this loss by cutting capacity and room availability particulary after weathermen had, wrongly, predicted a 'barbecue summer' in the UK.
Now they are hoping Britons who have weathered the worst of the recession as well as suffering miserable weather at home will book early to travel next summer.
The Co-op said early bookings so far this month are up 26% on the same period last year. But many are shunning destinations in countries which use the Euro because the high exchange rate means they are too expensive.
The average price of a package holiday to the Turkish resort of Dalaman next summer is GBP 516 per person compared to GBP 595 per person to Majorca.
Other resorts proving popular so far with early bookers include long-haul destinations such as Orlando and Las Vegas which have shown increases of 28 and 71%, respectively.
The number of bookings for old favourites like Algarve and Rhodes, Crete and Ibiza are showing little or no increases on this time last year.
"Research has proved, in these continued times of recession, just how sacrosanct a foreign holiday is to the British public,” said Thomas Cook chief executive Ian Derbyshire.
"We fully recognise what great importance the UK consumer places on their holiday and thats why for 2010 we are helping our customers to do more, without spending more."
