Holiday prices slashed to compete with 2012 Olympics & credit crunch

[richard]

Holiday giants are promising to slash prices by more than £500 in a bid to overcome the double-whammy of the cost of living squeeze and the London 2012 Olympics.

The firms, many of which are fighting for survival, are using both headline price cuts and free places for children to tempt customers to part with their cash.

Thomson and First Choice group has even decided to offer redundancy protection to holidaymakers reluctant to put down money on a break because they are worried about the security of their job.

Travel companies face an uphill struggle, with four in ten people taking the view that a foreign holiday in 2012 is a luxury they cannot afford, according to research by retail analysts Mintel.

Separately, the London 2012 Olympics in the height of the summer and school holidays is expected to encourage many thousands of families to stay at home.

Mintel found that spending on holidays both at home and abroad has fallen to a five-year low of £33billion, and the figure is expected to decline further in 2012.

Thomas Cook recently announced it is to close 200 shops, threatening 1,000 jobs, after making an annual pre-tax loss of £398million.

At the same time, a number of smaller travel operators, such as Holidays 4 U, have collapsed in recent months.

Ian Ailles, Thomas Cook’s UK chief executive for package holidays, insisted that many families still cling to the idea of taking a foreign holiday, despite financial adversity.

The firm rejected the idea that the 2012 Olympics will have a significant impact on the number of Britons going overseas, saying that only 3 per cent of those who have decided against a foreign holiday in 2012 said this was because of the Olympic Games.

David Burling, managing director of the Thomson and First Choice group, said: ‘Our research shows that customers would rather cut back on other luxuries than forgo their annual summer holidays in the sun.’


Source
By Sean Poulter
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