Holiday bookings up despite credit crunch - Cheaperholidays.co.uk

The deepening economic gloom has not caused any decline in holiday bookings at Cheaperholidays.co.uk with a good summer behind us, and superb deals on holiday bookings for 2009.

We had a huge rise in cheap packages and euro-zone destinations – Greece, Cyprus, Portugal and Spain. The US market was up – and so were bookings to Mexico, Egypt and Turkey. As were the ever popular all inclusive deals

It is too early to draw conclusions about summer 2009, but September bookings were only 1% down year on year. Even more encouraging, bookings for this winter appear marginally up on last year.

At the same time, the oil price was down to about $60 a barrel at the start of the week – despite a cut in oil production – way below the $147-a-barrel it hit in July and the lowest it has been for 17 months.

This is good news for airlines, tour operators and all of us paying fuel bills – which means more cash available to you the consumer. But the price fall will take time to feed through and be offset by the drop in the pound, since oil is traded in dollars. Put simply, a $60-barrel of oil now costs £40 – the same as an $80-barrel a year ago.

Also, since airlines and travel groups hedge on fuel – fixing prices in advance – they will not enjoy the full benefit of the price fall. At the end of September, TUI Travel reported 87% of its fuel this winter was hedged and 78% next summer and Thomas Cook was 92% hedged.

The big two have also hedged on currency – Thomas Cook on 91% of its dollar and 94% of its euro requirements and TUI Travel at similar levels. That provides stability in an otherwise frantically changing situation, but it does not come cheap.

The big question is what impact the falling pound will have on consumer spending.

Well our late deals and forward bookings are the same as last year, an unlike your high st travel agents we do not rely heavily on forward bookings with last minute and late deals our speciality.

“Demand for the summer holiday will be there, but people almost always delay buying decisions [in such circumstances].