p18 Columnist oct10 7/10/08 18:10 Page 18
news comment
ttglive.com
Kane Pirie Travel Republic
“There’s a current vogue for
seeing economic recession
as slightly worse than
global nuclear holocaust”
A
s the summer sunshine fades in The big two are focusing on margin, not
the memory, our minds turn to next volume. They are already committed to
year. The mass panic about what it contracting next year. In days gone by, the XL
will bring – a travel industry ritual – Leisure Group failure would have led to a bun
is likely to be on an epic scale this year. In a fight as rival airlines sought to soak up the free
sure-fire approach to looking stupid in the full- market share. In the current climate, nobody
ness of time, here are my predictions for 2009. has the stomach for a bold manoeuvre.
The UK economy will enter recession. There’s The weaker or less lucky businesses in travel,
a current vogue for seeing economic recession financial and other sectors will fail. This will
as slightly worse than global nuclear holocaust. keep financial protection in focus and all
Like several terms, the word recession is consumer-facing travel businesses must
almost inadequate for the breadth of scenarios have a strong message in place to avoid
it covers. exacerbating a tougher market with a
In mild form, recession will dampen growth; comparative trading handicap.
in extreme, there will be a bloody cull with Those companies with cash to spend
several market participants going to the will pick up acquisitions at bargain
wall. While some of the media are prices from overanxious vendors. The
hell-bent on convincing us that private equity houses are struggling as
we are on the verge of financial the debt markets are all but closed and
Armageddon and should start this leaves a clear field for the larger
stockpiling baked beans, I corporates.
am trying to remain more In many ways these economic shocks
optimistic. are healthy. Survival of the fittest. The
The UK consumer will tighten companies that successfully pilot their way
expenditure. The higher costs of food, through the choppy seas of 2009 will enjoy the
heating, petrol and debt will leave less money better market conditions beyond.
for other things including holidays, although We should not forget that the fundamentals
the top end of the market will glide by for the travel sector remain hugely positive: a
unaffected. Short breaks will take a growing population with ever more time and
battering. The beach market will hold up, money to spend on leisure. Long term, rosy.
particularly for the main annual holiday. Short term, unpleasant levels of turbulence.
Customers will be more price focused and
if you are not offering genuine value for Kane Pirie is managing director of
money you may as well pack up now. Travel Republic
18 10.10.2008
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