European Update

Marketing Committee Meeting

June 2009

European Stats

• Jan-Apr Europe down by around 2% to Caribbean

• Cancun and USVI keeping these figures higher with 45.9% and 49.2% growth respectively (USVI Jan-Feb figs only)

• Cancun will show massive decline in May, main beneficiaries out of UK being Dom Rep and Jamaica

• Biggest declines in % terms – SVG, AXA GND, ANU and UVF – being between 12 and 20% down.

Source: CTO

European Economic Indicators• UK

– Exchange Rates: Currently around• UK£1 to US$1.62 (up from US$1.47 Jan 09)

• UK£1 to €1.15 (up from €1.10 Jan 09)

– Sterling recovering its strength which will stimulate overseas travel

– Markets have been buoyant in the last two weeks, property values are reported to have risen by 2.6% in May, confidence is showing signs of returning

– Fuel prices rising again – hit £1 per litre at the petrol pumps – a significant barrier

– Political turmoil remains a threat to confidence

European Economic Indicators

• Europe – more stability– Exchange Rates: Currently around

• €1 : US$1.41 (up from US$1.36 Jan 09)

– Predictions of the Euro ‘collapsing’ by Q2 or 3 do not appear to be coming true, but Euro is definitely returning to a more realistic value against other currencies

– Recession is slower to bite in Europe, and media is not as obsessed, so consumer confidence is not as badly affected as in the UK

Market NewsUK

– bookings continue EXTREMELY late

– Virgin Holidays reporting average 8 days pre-book period

– Virgin Atlantic capacity restrictions putting stress on sales to main islands (demand is sometimes outstripping seat availability

– Tactical discounting continues – tour ops still urging us to give deals with a longer life, but many have refined systems and upgraded websites to cope better with constant tactical changes

– TUI offering Free Redundancy Protection Insurance (money back guarantee if you lose your job)

Market NewsUK

– Domestic tourism booming – up as much as 20% in UK holiday parks

– Caribbean holding up against other destinations – political unrest in the Far East and Sri Lanka deter travellers.

– See ba.com for new dynamic packaging system

– Virginholidays.co.uk new-look site

– The Mileage Company (formerly Air Miles) a worthwhile partner to pursue in these downtimes, picking up BA distress stock

Market NewsUK

– British Airways is launching two new services from London's Gatwick Airport, to Montego Bay, Jamaica, and Punta Cana, Dominican Republic.

– Both of the new twice weekly services will be launched on 25 October 2009.

– Gatwick to St Lucia increasing from three flights per week to five

– Gatwick to Barbados increasing from nine to ten

– Gatwick to Port of Spain from three to five.

– APD also remains a threat. More organisations including pilots’ union taking up the cause to have it abolished. Dutch and French have dropped theirs and now UK passengers are flying via other European cities.

• Germany – more stability – More stability than in UK.

– Big ops like Meiers and Dertour now refining tactical promotion methods but still pleading with us to give them deals with some longevity

– New Condor service announced to NAS from Nov

• France– looking for bargains – NAS / FPO flight

withdrawn in favour of Dom Rep

Market News

• Ireland

– Caribbean has come into vogue with the Irish.

– Thanks to a new Aer Lingus service that connects in Gatwick with the main Caribbean departures.

Market News