Travel industry 'must adapt or go under' says Abta

Travel companies must either adapt or go under, a holiday company chief said today at the start of the annual convention of travel organisation Abta.

Some of the talk about the travel industry recovering next year was "at best naive and at worst self-serving and unsubstantiated", added Richard Carrick, chief executive of UK self-catering holiday company Hoseasons.

The turmoil of the last 12 months had changed the face of the travel industry for ever and to suggest there was going to be a recovery in demand for holidays next year "smacks of blind optimism", he said.

Mr Carrick was speaking as Abta's convention began in Barcelona.

He said: "Every day an announcement comes from one of the major overseas operators saying that '2009 hasn't been a bad year' and that things are 'going to return to normal in 2010'. And frankly much of this is at best naive and, at worst, self serving and unsubstantiated.

"Some of these companies may have been able to get by in 2009 by heavy cost and capacity reduction to compensate for margin erosion from discounted late bookings, but to suggest therefore that 2010 will see a recovery in demand smacks of blind optimism."

Mr Carrick went on: "We are likely to continue to see a growth in unemployment, a reduction in public spending and a rise in tax and interest rates in the next 12 months. People are also carrying high levels of personal debt that built up through sustained borrowing and their focus is on cutting back and clearing debt, rather than spending.

"We all have to face up to the fact that the economic turmoil of the last 12 months has changed the face of the travel industry for the foreseeable future, and either adapt, or go under."

Among speakers at the Barcelona convention, which ends tomorrow, are former Conservative chancellor Lord Lamont and Carnival cruise company chairman Micky Arison.