Hays Travel is shifting focus to long-haul sales to counteract budget pressures.
- Long-haul sales are deemed three times more profitable than short-haul sales.
- The UK Budget presents significant financial challenges for Hays Travel.
- The travel agency plans to adjust its product mix to increase long-haul offerings.
- A three-year growth plan was unveiled to boost profitability.
In a strategic shift, Hays Travel is encouraging its agents to promote long-haul trips as a way to mitigate the financial impacts of recent budgetary changes. The company has identified long-haul sales as being three times more profitable than short-haul alternatives, positioning this focus as a necessary pivot to maintain profitability in light of rising costs, including a forecasted 10% increase in staffing expenses due to adjustments in national insurance and living wage rates.
Chief operating officer Jonathon Woodall-Johnston emphasised the need to support the short-haul market while rapidly expanding the long-haul segment. The objective is to see long-haul trips constitute one third of their total sales, thus forming a substantial part of their preferred product mix. This strategy was communicated at their annual retail conference, which hosted over 700 participants this year in Turkey.
Chair Dame Irene Hays has described the government’s latest budget as the most daunting challenge the business will face next year. She highlighted the necessity for a significant uplift in sales to offset the increased staffing costs, alongside a 50% hike in local authority rates. These expenses are part of wider challenges faced by the company as outlined during the conference.
Retail director Jane Schumm outlined plans to evolve Hays Travel’s product range. She confirmed ongoing support for short-haul holidays, but underscored the opportunity to improve long-haul services in line with the company’s successful ventures in the cruise market. This evolution is anticipated to enhance the company’s performance in the next fiscal year.
Woodall-Johnston provided clarity on the potential profitability of long-haul sales, reiterating that “a long-haul passenger is three times more profitable than a short-haul passenger.” The outlined growth plan targets increasing the proportion of long-haul travellers, seeing it as a vital move towards greater financial success.
The strategic emphasis on long-haul sales is aimed at counterbalancing the financial pressures induced by the UK Budget.
