HILLS BALFOUR WEEKLY REPORT – 20 January 2012

HILLS BALFOUR WEEKLY REPORT – 20 January 2012

WHAT’S HAPPENING IN THE UK TRAVEL INDUSTRY:

IATA reveals increase in premium travel… There has been a 1.7% year-on-year increase in premium travel, according to the latest figures. The November Premium Traffic Monitor, just released by the International Air Transport Association (IATA), said that over the year, there had been cumulative growth in premium travel of 1.7%. The number of passengers travelling on premium seats increased in November 2011, by 0.6%, compared to October. However, the level of premium travel has trended downwards from the high point reached earlier in 2011, according to the monitor. Although there was some increase from October levels, the size of the international premium passenger market in November was 2.6% smaller than in May 2011.

TC customers ‘not interested’ in recent City problems. Thomas Cook has claimed its customers are not concerned by its recent financial woes. Speaking at a media briefing in London on Tuesday, Ian Ailles, chief executive of mainstream UK and Ireland, said its financial problems which hit the headlines and saw shares plunge in November were ‘irrelevant’ to customers. Instead, he said the right product at the right price was their core concern for consumers when looking for a deal for the forthcoming year. He said: ‘Customers are not interested in our debt-equity ratio. We offer our customers reassurance. ‘It is important for them to get the right holiday at the right price and we are available to talk at every point in the booking journey.’

2m to book this week, estimates ABTA. Monday 16, dubbed Blue Monday or ‘the most depressing day of the year’, was forecasted to spark a bookings boom, according to ABTA. The association estimates that between 15-21 January, 2m people will be booking a winter or summer break ‘as the best possible pick-me-up’. January is the key booking period, and the third week of the month is the busiest for many travel companies, thanks to substantial discounts for early bookers and the urge to escape the gloom of the post-Christmas blues, added ABTA. Its most recent ‘dream holiday destinations’ poll saw the US overtake Australia and New Zealand to the top spot. The UK performed was in joint fourth spot with the idyllic Indian Ocean islands of the Maldives. Spain, Portugal, Greece and Italy are tipped to sell well again this year with the pound rallying in recent weeks to almost €1.20. Spain was second in a recent Post Office report on destinations offering the lowest prices for day-to-day expenses, behind Sri Lanka, which is one of ABTA’s 2012 Travel Trends ‘Hot’ destinations.

 

WHAT’S HAPPENING IN THE UK ECONOMY:

UK retail sales rise 0.6% in December. UK retail sales volumes rose by 0.6% between November and December, official figures show, after heavy discounting by stores. The Office for National Statistics (ONS) also said that sales were 2.6% higher than December 2010. The November's figure was revised down to show a fall of 0.5%, rather than the 0.4% originally estimated. Retailers, including Marks and Spencer, have said that they marked prices down sharply in the run-up to Christmas. The increase in the volume of sales removes the effect of inflation.

British consumers spent more online last year than any other country in Europe, a survey has found. UK online sales topped £50bn in 2011, up 11% year-on-year, and accounted for almost a third of online spending in Europe, according to a study by the Centre for Retail Research (CRR). On average, the CRR found British shoppers bought 39 items online in 2011, spending an average of £1,435. The figures say that Internet shopping accounts for 12% of the total retail spend in the UK. Online shopping search engine Kelkoo estimates the sector will grow by 14% in 2012. Another survey, the IMRG Capgemini e-Retail Sales Index, found online sales in December were up 16.5% year-on-year, to £7.9bn

UK inflation drops to 4.2pc as shops cut prices. Inflation fell sharply to 4.2pc in December from 4.8pc in November as aggressive discounting on the high street and lower gas and petrol prices offered some respite to the embattled British consumer. The Office for National Statistics said the last time there was a sharper monthly fall in inflation on the Consumer Prices Index (CPI) was December 2008, when the UK was in recession and VAT was cut. Last month clothing prices fell by 2.8pc on a monthly basis, as retailers slashed prices early to shift stock in the run up to Christmas and to boost sales of winter clothing which were hit by unseasonably mild weather. Core inflation, which strips out food, alcohol, energy and tobacco, fell to 3pc from 3.2pc in November.

 

WHAT THE UK PAPERS ARE SAYING:

Police seek dancer who 'dined' with disaster cruise captain. Italian police wish to question a Moldovan dancer who was allegedly drinking with Francesco Schettino, captain of the recently shipwrecked Costa Concordia, on the night the ship crashed. While the woman in question, Domnica Cemortan, says that she was with Schettino on the ship's bridge, parent company Costa Cruises has stated that it cannot corroborate Cemortan's claim. A passenger's account seemed to contradict Cemortan's story, placing both her and the captain in the ship's best restaurant, allegedly drinking wine, moments before the ship collided with the rock that tore a hole in the hull. Schettino has faced severe criticism over his actions leading up to the accident, but the Moldovan ballet dancer has defended his actions, insisting his heroism saved thousands of passengers.

New Falklands alert. David Cameron has informed the House of Commons that he spent Tuesday in consultation with the National Security Council, securing the military protection of the Falkland Islands. As the 30th anniversary of the Falklands conflict approaches, the Prime Minister accused the Argentinean government of acting like a colonial power which seeks to prevent its inhabitants from remaining British. Argentina has been lobbying for Latin-American support for negotiations over the South Atlantic islands' future. A British exploration company discovered oil in the North Falklands Basin in 2010. The British government considers the region to be better-protected than it was in 1982.

Germany cuts 2012 growth forecast as euro crisis bites. Germany has slashed its 2012 growth outlook from one per cent to 0.3 per cent, emphasising the effect of the eurozone crisis on its previously prosperous economy. However, Berlin said the country would avoid a depression, with growth bouncing back in 2013 to 1.6 per cent. Germany's economy minister, Philipp Roesler, dispelled any fears of a full downturn, saying that there can be no talk of a recession. This comes as Joseph Stiglitz, the Nobel Prize-winning economist, warned that Europe is destined for a double-dip recession, backed up by forecasts from the Euroframe Group of research institutes.

Aid delay led to disaster in horn of Africa. According to a report published by Save the Children and Oxfam, between 50,000 and 100,000 people died in a drought that struck the Horn of Africa in 2011. The report argues that a significant proportion of these deaths could have been avoided if the international community and humanitarian agencies had acted earlier and more swiftly to provide aid when warning signs of the impending disaster first appeared. Human factors turned the crisis into a disaster, says the report, which posits that current emergency response systems are flawed, and that they will soon be tested again as fresh shortages of food are reported in west Africa and the Sahel region.

And on a lighter note…

'Escaped tiger' spotted on hotel roof turns out to be a life-sized toy. Fire-fighters are well versed in rescuing cats out of trees - but what about a tiger on a roof?

Have a lovely weekend!