Pricing problems ahead if suppliers keep discounting, agents warn

Personal Holiday Advisor Joe Biggs said: “Late discounting to fill record capacity growth seems to be the growing trend among many operators at the moment. 

“Early bookings give every element of the supply chain – agents, operators and accommodation providers – more certainty and higher margins.

“The more discount we offer now, the more customers will expect in future and every time they book, it’s a vicious unhealthy cycle and a race to the bottom.” 

Perfect Getaways director Dave Palmer said “everyone” started discounting in late spring, early summer when booking levels “plateaued”. 

“Customers come in with their phones with a LoveHolidays or On the Beach quote,” he said. "We generally try and match – or reimagine – the quote, and then sell on service. If they walk into our shop, we will normally manage to convert them.”

Travel Village Group chief executive Phil Nuttall highlighted the importance of agents making bookings as a result of increased footfall brought about by "strong" sales messages in the market. 

"We’re very focused on delivering as a business to customers and the operators that we work with," he said. "The volume of customers that we’re sending away in the next 12 to 16 weeks is considerable. 

"I said at the end of last year there was going to be a lates market this summer – and I stand by that. I do think a lates market and discounting go hand in hand. 

"If we increase capacity, there will be that added pressure, but we, as a business, need to be maximising these opportunities.

"There will be a large percentage of people going into agencies because of sales messsages right now. Good agents will capitalise on that." 

’There are agents out there who discount a lot’

Personal Travel Consultant Aaron Petty admitted the market had got “worse”, but argued it was the agents who were discounting rather than suppliers. 

“There are travel agents out there, especially online cruise and long-haul travel agencies, who discount a lot,” he added. 

“I’m not really worried about the effects of overcapacity in the market as I do believe there are enough customers out there for everybody.” 

Ocean World Travel owner Michele Dance said her cruise specialist agency had been unaffected by extra capacity in the market and then any discounting from operators and airlines trying to fill seats. 

“With cruise, it’s been the opposite,” she noted. “Princess Cruises sold out for 2024 a long time ago.  Last year, cruise lines were slashing prices. It was £399 for a week in the Med.

“If you want to book a four-berth family cabin with P&O Cruises you will not find one. We’ve not been able to get one for months. Cruise lines – like P&O Cruises – target the package holiday market – and they’re doing it very successfully.”