Pwc: Travel Companies Should Not Panic into Cutting Prices too Soon

Travel companies should hold their nerve and not panic into cutting prices too soon. That’s the advice from PricewaterhouseCoopers LLP, based on the results of a poll of 2,000 British consumers.

“For a few years we have seen booking patterns getting closer to departure date,” said Malcolm Preston, the company’s head of travel. “The industry was doing its best to reverse this trend with exclusive deals, reduced capacity and more differentiated product.”

According to the PricewaterhouseCoopers research, over two thirds of those polled will trade down from their usual level of holiday, but only 16 percent will stop going on holiday altogether.

Aside from cutting back, 25 percent of the 2,000 polled will take a cheaper holiday in the same location by staying in a cheaper hotel, opting for self-catering, taking cheaper transportation/airline, waiting for a last minute deal and cutting 14 nights to 10.

However, the intention to cut back on holiday spend is less rife than it was last year. In a previous survey, 20 percent more respondents said they were prepared to take fewer holidays in Summer 2008 than six months later, and a fifth more were intending on cutting their holidays altogether in that previous.

On the domestic front, PwC believes inbound UK tourism will fall as the recession reaches more parts of the world, but this will be countered by the drop in value of the sterling and UK-domestics holidaying at home.

It said this trend is driven by family based holidays, as 45 percent more 35–54 year olds are saying they intend to stay in the UK than when asked the same question back in July of last year.