Martin Alcock on overcapacity in 2024: TTC quoted in Travel Weekly

This article was written by Travel Weekly; you can view it in full on the Travel Weekly website.

Overcapacity in the market next year could have a knock-on effect across the whole travel sector if it is not matched by consumer demand, Aito delegates have been warned.

Speaking at the Aito Overseas Conference 2023 in Thessaloniki, Greece, Travel Trade Consultancy director Martin Alcock said the current economic uncertainty and the additional capacity put into the mass market for 2024 was his “main concern”.

This follows the decision by the largest players in the trade to pile on more capacity for 2024. Jet2holidays, Tui and easyJet holidays between them have put on 3.3 million extra seats in the market between October 2022 and October 2023.

Alcock said the trade could witness its “largest-ever peak” – the traditional peak selling period in January and February – as a result.

But he warned that the current economic uncertainty may leave operators with seats unsold.

He said:

“I cannot see there is enough demand for them all to achieve that. My biggest fear, like Icarus flying too close to the sun, is that some of these large operators will come unstuck.

“If the bookings don’t come in, it means potential challenges and there’s a knock-on effect for the rest of the market. It’s going to be a really interesting market.”

The top 20 Atol holders, representing 84% of Atol passengers, want to grow capacity by 25% across all four quarters next year, said Alcock, while that is not the case “by and large” for the remaining Atol holders, which represent the remaining 16% of Atol holders.

“Next year [these] companies are less bullish,”

he said.

He added that current expectations by the Bank of England were that interest rates would not come down “too soon” and that increases in wages would take time to feed through to create a “feel-good factor” among consumers.

“We have very low levels of consumer confidence. It improved and we have just seen it drop again,”

he added.

But he said news in the government’s autumn statement this week of a 2% cut in the main employee rate of National Insurance from 12% to 10% from January 6, 2024, equivalent he said to around £100 a year for an average salary, was likely to have very little impact on customers of Aito companies.

“I don’t think it pushes the needle much, I don’t think it makes much difference,”

Alcock said.

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