prices are going up all the time [TYLKO U NAS]
Natalia Szewczak, Business Insider Polska: There has never been such a year in the history of tourism.
Piotr Henicz, vice president of Itaka Holdings: We’ve been repeating this sentence every season for several years now, but each time for a different reason. However, this year was very special – the outbreak of the war in Ukraine, the weak zloty exchange rate, which is still unpredictable, and the very high prices of aviation fuel have a huge impact on the cost of tourist services. In addition, in the middle of the year the economic situation and the developing economy stopped, enormous inflation and an uncertain future for the coming months. All this is not conducive to tourism.
While we have seen demand this season, which has been put off by the pandemic in recent years and increased customer numbers and travel agency turnover, profitability and financial performance have not improved.
So what will Ithaka’s score be?
Last year, Itaka Holdings’ gross profit amounted to PLN 120 million gross. We assumed an increase in profit for this year, but taking into account the circumstances mentioned above, it is not possible. In any case, we end 2022 with a still very good financial result – a lot still depends on the end of the year, but we expect a profit of approx. PLN 100 million gross.
We also estimate that we will close the end of the year with the number of 750-770 thousand. customers. For comparison, we closed 2021 with 495,000. customers, i.e. the increase is estimated at approx. 50 percent. However, it is still not 920 thousand. customers served in 2019, in the last “normal year”.
Our turnover was also much higher, but it results from the increase in prices and the fact that customers had to pay more for holidays this year.
How much more?
From 15 to 30 percent more compared to last year. It all depended on the direction of travel – whether the tourist chose Albania, where you fly 1.5 hours, or the Canary Islands, where the flight takes 6 hours. The share of the cost of fuel is crucial in the final price of a holiday trip.
What surprised you the most about the behavior of tourists this year?
We were all frightened first by the outbreak of the war in Ukraine – the sales traffic was completely frozen for a month and customers did not want to make any decisions about holidays, and this is not surprising.
However, after March, everything suddenly changed. Sales rebuilt quickly and it was a very big, positive surprise for us. In April it moved quickly, and in May it even exploded. We have never had such sales as we had in May and June. These were absolute sales peaks of the last many, many years. At that time, we recorded increases of 120-130 percent. compared to the record-breaking 2019
When is the best time to buy a vacation?
Now. When buying a vacation at this point, in the so-called first minute, for June, July, August or September of next year, the client will make a good deal. Prices will not fall, there are no reasons for this. It will definitely be more expensive, the prices will be higher – no matter what happens.
Our suppliers and hoteliers from virtually all countries are constantly increasing their prices. They want to renegotiate the contracts we have signed so far – all due to inflation and an increase in operating costs.
Although I understand, and this is also what we notice in Ithaca, there is a – so far – small group of clients who are concerned about their financial situation in the future and wondering whether their income will allow them to leave in a few months, delaying the booking of holidays. Feel anxious, although I think that the vast majority of our clients will go on vacation regardless of the situation.
How much more will we have to pay for a vacation in 2023?
Currently, we are already recording an increase in prices at the level of approx. 10%. compared to the past year. I repeat – it will be more expensive. Nobody knows how much the prices will eventually rise. The situation is unpredictable – it all depends on the dollar and euro prices and aviation fuel prices.
Which directions will be the cheapest next year?
Nothing will change here – where it is close, it will be cheaper, e.g. in Bulgaria or Albania. On the other hand, when it comes to the price-quality ratio, Turkey and Egypt will pay off the most.
This does not mean, however, that Poles will not fly to the Canary Islands or southern Italy. Invariably, these are the destinations that Polish tourists like.
Polish tourists are looking for savings?
I can not see it. A customer who was used to a four- or five-star hotel will still choose one. It does not lower the standard.
We know what the situation is and that is why we at Itaka pay attention to the fact that our offer is more flexible, which translates into the price. We have a new Itaka Smart service, which is based on the so-called dynamic packaging, which gives much greater possibilities of individual vacation planning – the customer can freely choose the flight, hotel and duration of the trip. He does not have to go for a standard week, but only for four days, for example.
You say that by buying a vacation now, we will save the most. However, the risk that our plans will change and we will have to cancel the trip is considerable. So what is the sales level of insurance against resignation from vacation?
The number of opt-out insurance policies among our clients has grown significantly recently. Compared to the pre-covid period, even by 50-60 percent. This is a huge increase.
Another thing is that as part of the first minute offer in Itaka, customers can change the date, destination, hotel and travel participants for free. We also offer a price stability guarantee.
What are your current risks for outbound tourism for next year?
The main risks are: exchange rates, the price of aviation fuel, the level of inflation and the wealth of Poles’ wallets. These are four components that we, as tour operators, have no influence on, and they determine what the next season will look like.
Do you think that in 2023 there is a chance to return to the historical 2019 results?
That’s our plan. We have more seats booked on planes and hotels. We know that we will have more customers and record revenues. The trick, however, is how much we sell our offers for. So this is the biggest question mark for the coming year – the company’s profitability.
And what are the biggest problems of tourists and travel agencies today?
In addition to what I said a moment ago, we also have a huge staffing problem. Well-qualified employees are lacking. During the coronavirus pandemic, there were job cuts in travel agencies, now we need to rebuild it. The possibilities of acquiring qualified employees are much smaller than a few years ago.
Author: Natalia Szewczak, Business Insider Polska
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