Tour operators slash prices to secure strong start to the year

Travel companies are shrug-ging off fears of a consumer slowdown with strong bookings as holidaymakers rush to take advantage of January sales.

With 30 per cent of package holiday bookings taken in January and February, tour operators have slashed prices to woo travellers while airlines are also offering large discounts.

The Association of Brit-ish Travel Agents (Abta) said that although the travel industry is "not recession proof, the summer holiday is usually the last thing to go".

One of the reasons for the current sales blitz is to encourage people to book in advance, said Sean Tipton, of Abta. "This helps the bottom line and it also helps when tour operators are negotiating contracts with hotels," he said. "It keeps prices down."

He added that over Christmas and New Year bookings had been "very healthy". "If people are going to tighten their belts, they may decide not to get a new kitchen, or bathroom, but a summer holiday is one of the last things they will put off."

British Airways is offering up to 25 per cent discounts on flights, Ryanair has 2 million seats for sale at 10 one way and Thomas Cook, which merged with MyTravel last year, has launched its biggest post-Christmas campaign in the UK and is offering free days as well as money off.

Thomas Cook's chief executive Manny Fontenla-Novoa said yesterday that early indications for next year's summer season across the group were good "with bookings ahead, even though capacity is expected to be lower than for summer 2007".

After the company's tie-up with MyTravel, Thomas Cook reduced its capacity for summer 2008. "But what comes with having a highly flexible operating model is the ability to move our destination capacities to where customers want to travel," Mr Fontenla-Novoa said.

Holidaybreak, which specialises in adventure travel, short breaks and camping holidays, agreed that consumer demand was holding up. "In terms of discretionary expenditure, people are reluctant to give up their holidays, whether it is adventure trips to Peru or short breaks to London," a spokesman said. "And, when it comes to education-related activities, they will not let their children miss out on school trips. Our school adventure centre business is already 97 per cent booked for 2008."

Alison Couper, from the online travel company Expedia.co.uk, said that as household spending tightened "consumers are increasingly focused on finding the very best deals and are prepared to spend longer researching their trip".

"Both of these factors continue to drive the popularity of online travel booking, in-line with the growth seen in online shopping over Christmas, with consumers finding the choice of deals, access to additional information such as consumer reviews and added value extras, including car hire and attractions, increasingly motivating," she said.

She added that a recent poll conducted on behalf of the company revealed that people were becoming more interested in domestic travel with Liverpool, which is European Capital of Culture this year, moving into the top 10 of popular destinations alongside more exotic locations, such as China, Argentina and New Zealand.