NEWS Bosses remain bullish about trading next year despite the economic forecast Website sale is off Youtravel upbeat cards for few years

Youtravel.com is unlikely to be about the future up for sale for at least two to three years, chief executive Juliet Dennis From left, are and founder John Kent said. [email protected] Paul Riches, Originally, Kent aimed to John Kent sell the business three to four Youtravel.com has outlined and Graham years after its launch. But he expansion plans to increase Nichols on said: “The market is very UK and international sales, youtravel. different to a few years ago. It while brushing off speculation com’s VIP may take fi ve years before about its future. agent trip we sell it.” The bed bank, which has to Rhodes Since launching in October sold predominantly beach 2006, the company has had product since it started up two three offers, one within a week years ago, is to launch world- of launch, he added. wide city accommodation on Group managing director its website later this month. Graham Nichols said: “If you It will provide product through thought you could increase XML links with city break business signifi cantly for specialists, rather than another two to three years, why contracting hotels itself. wouldn’t you grow it fi rst? Its Caribbean product range That’s what we’re going to do.” is also being boosted signifi - The admission came as Kent cantly, while the Middle East predicted two more bed banks and the ski market have been “We are going to amount in the black. We are didn’t have principal status. will disappear from the market earmarked for future growth. only in our second year and The cost of taking on principal within eight months amid There are also ongoing talks to break even or be still investing in the business.” status was £700,000 and our continued rumours (denied by partner with cruiselines to sell a small amount in The upbeat forecast follows pre-launch IT costs were both parties) that Thomas Cook three and four-star cruise-only a £900,000 loss posted by the £1 million,” said Kent. will buy medhotels.com. product. the black” group after its fi rst full year Rumours of unpaid hotel Nichols said removing The bed bank’s distribution of trading. bills from this summer’s peak competitors from the market could also be expanded by The expansion plans follow Chief executive John Kent season were vigorously denied could only be good news for breaking into affi nity markets. news the bed bank expects to dismissed speculation about by sales and marketing director the bed bank. Group managing director break even and make a small the bed bank’s future fuelled Paul Riches. “These are vicious Meanwhile, Kent and Nich- Graham Nichols said: “We are profi t for its second year, end- by news of the loss and the rumours put out in the market- ols were adamant the dynamic looking into other distribution ing October 31. It will have unstable trading environment. place by competitors that packaging market will survive channels, or portals, where we booked more than 500,000 He blamed the loss on should know better,” he said. the downturn and aftermath of can do tie-ups,” customers in its second year of specifi c start-up costs, includ- The bed bank is now the XL Leisure Group collapse. Meanwhile, sales out of trading, an increase of 81% on ing employing 45 full-time reviewing whether to drop New start-up Kiss Flights and European markets will be its fi rst year. Turnover has al- staff for eight months prior to principal status in the next extra fl ights from Monarch tapped for further growth, and most doubled to ⇔112 million. its launch in October 2006, IT month. Nichols said: “How Airlines and easyJet were the bed bank will consider sell- For its third year, it is tar- start-up costs and the adoption can we go on trading at a encouraging, said Nichols. ing out of new areas such as geting a 25% increase in turn- of principal status. “Two weeks commercial disadvantage? eastern Europe. International over and “substantial” profi t. before we launched, Triton and What is important to our sales account for 10% of Nichols added: “We are going Co-op agents said they would customers is insurance and For daily news go to youtravel.com’s turnover. to break even or be a small not deal with bed banks that health and safety,” he said. www.travelweekly.co.uk ROUND-TABLE DEBATE SHAPE UP TO SURVIVE Agents on a youtravel.com-hosted trip to Rodos Palace in Rhodes, Greece, discussed concerns for the year ahead and how dynamic packaging agents will have to rethink the way they do business to get through 2009. Juliet Dennis reports

Redundancies as a result of the ed on September 12. We are just WHO WAS ON economic downturn could have waiting to fi nd out how it’s a serious impact on trading going to play out. A big factor THE PANEL? next year, according to agents for us will be [fl ight] supply.” Chetan Patel, at a round-table debate. The creation of Kiss Flights managing director, Travel Trust Association di- by former XL staff could help, A1 Travel, Ilford, Essex rector Steve Clark said: “There he added. “Kiss Flights is small will be a severe downturn next but could soak up demand if it Nick Jackson, year. If there are redundancies can be reactive. There is an op- managing director, it will affect our industry.” portunity for more to come in.” Patel said: “Fuel prices are all-inclusive or not, we will all Freedom Direct, Newcastle A1 Travel managing director coming down. People will book need to look at what products Chetan Patel added: “Next year January sales early; the question is whether we are selling to target that Matt Todd, people will look at what they The peak sales period could they will book a dynamic pack- market. Customers will want sales manager, spend and cut down on shorter enjoy a boost despite the down- age or a conventional package.” one main holiday and they will Qwerty Travel, Surrey holidays.” turn, said Jackson. But youtravel.com sales and want it to be perfect.” He warned dynamic packag- He added: “It’s hang yourself marketing director Paul Riches But Patel warned of a return Steve Clark, ing agents could be worst hit. time at the moment, but in Janu- maintained people would book to more allocation-on-arrival director, Travel Trust “The big two [travel companies] ary things might be a little rosier. later because of fi nancial con- holidays as sectors of the mar- Association will be winners. Capacity has Low-cost carriers’ best prices cerns unless there was a “com- ket demand cheaper holidays. been cut so fl ight prices will go are in January so if you don’t pelling reason” to book early. “Can we start selling alloca- Paul Riches, up, so anything we sell will go book then you will miss out.” tion-on-arrival again, going sales and marketing up. They [major operators] are Qwerty Travel sales manag- Spend back to 10 years ago? Custom- director, youtravel.com selling packages 5% cheaper er Matt Todd said sales of Todd predicted customers will ers going away next year will than we can sell it at net.” dynamic packages could be spend more on their main not be able to afford that bit Liz Garfi eld, Freedom Direct managing helped by bed banks contract- holiday as it will be their extra. The important thing will national sales manager, director Nick Jackson agreed ing accommodation earlier, only one. be how much that customer youtravel.com fl ights taken out of the market with stock on sale from now He said: “Because people can afford next year.” by XL Leisure Group’s demise for next summer. are only taking one holiday a It could mean dynamic were a major issue for dynamic He added: “People who year, they will look at spending packaging agents securing packaging agents. missed out on a holiday this year one-and-a-half times the their own airline seat alloca- He said: “This winter start- will book early for next year.” amount on it. Whether they buy tions, he added.

18 | Travel Weekly | October 24 2008 www.travelweekly.co.uk Clockwise ABTA when you may as well from left, get supplier failure cover – let the customer decide if they are Steve want to be covered or not.” Clark, Nick But Clark argued this was Jackson, not fool-proof. “The CAA has Chetan Patel, the government behind it to Paul Riches, pick up the bill. What happens the panel in if the scheduled failure insurer talks, the goes out of business? There is group no easy fi x, but the customer relaxing at has to be protected.” the Rodos Palace Hotel Destinations and Matt Greece could have a tough year Todd next year because fewer fl ights are serving the destination fol- lowing XL’s collapse, Riches warned. “It will be tougher for Greece next year. People who go to Greece will switch to other destinations, compared with Spain, which has a real hardcore of people who go back every year.” Todd agreed, but said: “The business will come back. People love Greece.” Florida is another market likely to suffer from the wors- ening dollar exchange rate, while non-euro countries could benefi t again from the poor euro-pound exchange rate, said Clark.

Commission “Customers are selling more extras such as cost base, it is not running Agents will have to sell more excursions, airport hotel its business properly.” add-ons to boost their bottom the ones that are stays, attraction tickets, car lines as commission payments winning. They hire or transfers. Financial and company margins will protection inevitably be squeezed next will get cheaper Staffi ng levels Financial cover to protect year, the panel agreed. holidays as it gets All businesses will be forced to holidaymakers from further Todd said agents will be more competitive” look at staffi ng levels next year. failures is going to be critical 8 forced to discount more Clark said: “I am not saying next year. commission to gain a competi- we are overstaffed but I think Jackson said: “The demise Youtravel.com’s second tive edge to win bookings. we will have to look internally of XL has highlighted the need annual VIP agents’ trip “Everyone is going to be penny- at our own costs. Let’s use the to focus on consumer protec- wasn’t all work and no pinching. We will have to give recession to get ourselves fi t tion and derisking ourselves as play. See some of the fun away more commission.” and ready [for when bookings much as possible.” agents had when they Riches said: “Margins will be return].” Patel called for a change in started throwing squeezed next year. Customers Jackson added: “More than the way customers are protect- fl owers at a traditional are the ones that are winning. ever we are focusing on ed. “The government has got to Greek evening. They will get cheaper holidays every staff member. You have to intervene; everything that is Go to the Travel Weekly as it gets more competitive.” look at every staff member’s travel related has to be protect- Postcards blog on Todd said the onus will be contribution to the business.” ed,” he said. “What’s the point www.travelweekly.co.uk/ on agents to fi nd ways to boost Riches said: “If any of having bonding in place with postcards revenues, and this could mean company is not looking at its the Civil Aviation Authority and