Market Shocks

The UK Travel industry is going through a funny time (funny as in peculiar, not ‘ha ha’).  The short version is the market conditions are nothing like it’s seen before and this is because of:

  1. The threat of IS (perceived or not) in North Africa and more so, Turkey
  2. The migration crisis (affecting Greece and more so, Turkey)
  3. The swell in demand to Western Med destinations (pushing prices up and availability down)
  4. The increase in tourists from Germany and Russia to Western Med (making point 3 even more acute)
  5. The European Football Championship and the Olympics (although no one is talking about these events at the moment which illustrates the focus on current conditions)

Typically the UK travel market can withstand shocks (9/11, war, bombs in various locations and more…) as the Brits never give up their holiday.  However, shocks are just that, one offs.  The threat of IS is not a one off.  Nor is the migration crisis.  Both have been in the mainstream news for months.  Both are played out in the media daily and unfortunately no obvious resolutions are on the horizon.

Those travel businesses which can be flexible will be ok.  Any travel business which is not e.g. has many fixed assets, is unable to adapt quickly,  will suffer in terms of profitability, or worse.  Its funny to see some of the more traditional outlooks regards the current state of affairs.

The more traditional comments in the media seem to move the argument to the dominance of airlines and the on line travel agents vs tour operators model.  How funny!  I’ve seen some complaints there isn’t enough market share or flight route information and so businesses affected aren’t able to make decisions.  If a business is inflexible and unable to adapt there is no one to blame but the management as thats who are taking the decisions.  Having dependance upon third party reports cannot be a good thing.

The changing conditions not only expose some businesses but also open a world of opportunity.  The shared economy businesses should thrive.  With the extra demand from the UK holiday maker to Spain, AirBnB et al should be making hay.  If I was them I’d be all over marketing my services and tying up with Uber for transfers (maybe).  Indeed, this could be the year we see material change in consumer behaviour as the masses discover the shared economy.  As a result we may well see changing consumer behaviour in future.

We’ll also see consumers visit new destinations (Costa Rica is already proving popular).  Again, this is FANTASTIC! this opens up so much opportunity and lets customers easily visit and discover parts of the world they may not have previously considered.  This can only be a good thing.

Clearly, the recent events we have seen and some of us experienced in North Africa are awful and I for one dearly hope we see no more conflict.  Yet in these times of change and uncertainty opportunity appears and presents new paths for the future.  Relying on traditional thinking and methodology seems old hat to me.  Whilst the past may provide inspiration, new times mean new ideas.

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