Perspective – August 2011
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Promising early sales for 2012
WHILE sluggish consumer spending has most other retail sectors immersed in gloom, travel – at least outbound travel – appears to be immune.
Thus Webjet not only achieved record new levels of turnover and profit in the financial year to June 30 – it also reported: “July results confirm this trajectory with the month recording a total transaction value (TTV) growth of 22 per cent and a profit increase of 19 per cent before tax.”
Contrasting this buoyancy with “negative economic data for the general retail sector”, Webjet attributed it to “the penetration of internet travel sales continuing to shift from traditional channels”.
But the evidence is that the continued growth in travel spending is by no means confined to web transactions.
Luxury cruises, for example, are not sold in any great numbers via the internet. Yet Silversea says it is experiencing “a surge in late sales for 2011 and significant early bookings for 2012”.
So far in 2011, Silversea’s Australian market growth is running at an annual rate of 27 per cent while it is achieving high yields compared to the line’s other operations worldwide.
A similar story is merging from the Europe coach touring sector as it puts together its “early bird” offers for 2012.
Trafalgar, for example, says it is experiencing significant sales increases for 2012, with “double-digit growth in forward bookings compared to the same period last year”.
The numbers cited by the coach tour operator are staggering – overall bookings up 53 per cent for 2012 compared to the same time last year and a 153 per cent year-on-year increase in forward sales for the US.
Of course it is early days and experienced industry executives are rightly urging caution.
Bunnik Tours’ Dennis Bunnik, for example, declares himself “a bit cynical of supplier claims of ‘record’ growth in the trade media”.
But he acknowledges that his own company’s enquiry rate for 2012 indicates it will be a strong year.
“However the continued stock market volatility will have an impact on self funded retirees and that may slow down demand a little,” he says.
Similarly, Albatross Tours’ Euan Landsborough acknowledges “the intent (to travel) is out there” and all the portents are for a successful 2012. But he recalls how bookings from self-funded retirees dried up ahead of the Global Financial Crisis and points to the potential for turmoil on the world’s stock exchanges to cause a repeat.
However, even after taking such caveats into account, the upbeat reports of early booking trends provide the basis for considerable optimism about 2012.
As we reported in our last issue, feedback from National Travel Industry Awards submissions revealed concern and uncertainty about prospects for 2012.
But actual results so far – admittedly at an early stage of the selling cycle – clearly suggest the concerns might be unfounded. There appears good reason to look forward to another good year for outbound travel in 2012.