"Currently, there is high interest in vacation packages in Spain. However, everybody from Western Europe is heading down there, and prices will go up," says Jiří Jelínek, CEO of the Fischer Travel Agency.Is this year's situation worse than the conditions during the financial crisis in 2009?
The two cannot be compared. At that time, people lacked money, and vacation was one of the first items in their budget they decided to eliminate. This year, people have enough money because the economy is doing well and wages are growing. However, the selection is nowhere near to what it used to be. I think that the entire market for holidays by air will decrease by at least 10% this year.
How is your travel agency doing under the present circumstances?
We expect that our this year's turnover will be about the same as last year's despite the current conditions. The economy is growing, and people pick different, more distant destinations than those where they used to fly to in the past. Our advantage is that we offer a broad portfolio of countries, but travel agencies that only focus on a handful of regions where people are afraid to go can get into serious trouble.
Do you predict that somebody will go out of business this year?
Certainly not any company from the top five (Editor's note: Exim Tours, Čedok, Fischer, Blue Style, and Alexandria), but as far as travel agencies further down the line are concerned, it's hard to tell. It could certainly happen. There is no doubt that travel agencies whose business relies on holidays in Egypt, Tunisia, or Turkey, that is countries affected by the biggest drop in sales, will face problems.
The Kos Island in Greece is on top of the destinations where the most serious drop in sales has been registered. What is your explanation?
It has been affected by what's published in the media. Everybody associates the island with migrants. Even though nearly no refugees arrived and no problems were encountered there in the course of last year, interest in Kos as a destination has declined by tens of percent. And prices correspond to this trend.
Which countries are taking place of those where holiday-goers no longer want to vacation?
There are two trends: there has been an extreme surge in demand for Spain, especially Balearic Islands and Canary Islands, as well as other European destinations. However, these are places where all Europeans want to go, and the high demand is reflected in prices, which are logically rising. For this reason, there are more and more people who opt for a summer vacation in destinations that are more distant. For instance, there has been a huge increase in interest in vacation packages in the United Arab Emirates, and we're starting to sell holidays on Oman.
However, high prices make Dubai a destination not everyone can afford. What sort of tourists fly there?
The high competition among air carriers has pushed the prices of tickets very low, which means that vacation packages there are about as expensive as an all-inclusive stay in a five-star hotel in Turkey last year. That's the current typical clientele for Dubai. In addition, we've found out that people prefer travelling for shorter periods, such as for a long weekend, but more often in the course of the year. The fact that clients are attracted by exotic destinations in the summer, as they are during the rest of the year, is a new phenomenon this season.
When did you realize that the countries where people want to spend their vacation have substantially changed?
There were some signals already during the last season, but the new situation became evident in October when we launched advance sales. There was no interest in countries that used to sell well long in advance in the past. In response, we quickly started to look for capacity in other destinations for which demand has been on the rise this year.
Some say that there will be no last-minute offers this year. Is it only scaremongering?
There will be no last-minute packages for destinations for which demand exists. On the contrary, there will be last-minute offers for countries in which customers weren't interested during advance sales. For example, Turkey will end up being a big hit because prices there have fallen by more than a half. There is a paradoxical situation in Germany, as more German tourists will travel to Turkey this season than was the case last year. Holidays in Turkey have become so inexpensive that people fly there despite perceiving a certain degree of risk. I think that the situation in the Czech Republic will be similar.
Statistics show that the number of people who buy a vacation package from a travel agency is decreasing, while, in contrast, there are more of those who buy airline tickets and accommodation on their own. How do you see the future of your business?
The travel business is going through a major transformation, and not everyone might survive. The trend is obvious, and it's up to us to do our best to offer people better services at better prices than what they'd get if they organized their vacation on their own. In the last three years, our firm has invested tens of millions of crowns into various new technologies that are used on advanced Western markets. Thanks to that, we are able to arrange vacation packages for duration other than the traditional seven to 10 days. Since we know that customers want as wide choice as possible, we have several tens of thousands of hotels in hotel banks (Editor's note – hotel booking systems not available to the public) in addition to the roughly two thousand facilities with which we have contractual partnerships. No other travel agency in the Czech Republic offers such a broad variety of choices.
But all that are services that people can procure on their own on the Internet. And sometimes for less money ...
We are aware that as far as, for instance, accommodation in large cities is concerned, we'll probably never catch up with large booking portals, such as booking.com, but we're still quite a bit ahead as regards accommodation at seaside resorts. Hotels there mainly strive on business brokered by travel agencies. All hotels we use must be appropriate, must conform to the design of our portfolio, and must be verified. We have explicit quality guarantees and compensations for any failure to meet the prescribed quality standard. When you book a hotel over the Internet and its services do not match what was advertised, you'll be hard put in trying to claim compensation.
Is it true that you will no longer publish paper catalogues?
We are limiting their quantity considerably since the vast majority of what we offer is posted on the Internet. But we still publish them because especially older clients like them and use them to choose their vacation.
As the average earnings in the Czech Republic are rising, it would make sense if interest in vacation packages were growing as well. Which holidays are currently more in demand, the less expensive or the more expensive?
Under normal circumstances, the less expensive ones would be on the rise because average earnings are growing faster among people in the lower income bracket. They would now be buying holidays in Turkey and Egypt, but they are not because they're waiting until the eleventh hour. So, this year will most likely see a higher growth in the segment of more expensive vacation packages.
Because of the hot weather last year, people were taking their summer vacation in the mountains. Have you noticed this trend?
There has been a certain growth in this segment, but nothing spectacular. The Alps are not exactly an inexpensive summer destination, which means that a lot of people prefer traveling to a seaside resort, simply because it is less costly.
Because of the current security concerns, it is expected that demand for holidays in the Czech Republic will grow substantially. Are you interested in that business segment?
At present, we don't see much potential for entering the market and providing our own added value; there's not much we can do. So, the answer is a no. Instead, we will continue convincing Czech clients to travel abroad.
What is the future of charter flights in the travel business?
Their numbers will decrease, and it's already happening now. All you have to do is look at Travel Service, which now offers most charters as regular flights under the SmartWings brand. In the case of trips to exotic destinations, we have stopped using charters altogether, and the decision has proved to be a step in the right direction. I expect that the trend will be similar with respect to destinations with a shorter flight time. People mainly want flexibility.
There have been rumors among travel agencies that Travel Service's charter monopoly is less than optimal. Hasn't the time come to find a competitor for the Czech market? Are you looking for one?
What Travel Service provides is comparable to services offered by other European carriers; there is no difference. In addition, they are able to service Moravian airports. In the past weeks, quite a few people have contacted us with concerns about Air Cairo in connection with the recent tragic accident of an aircraft owned by the company's parent company, Egypt Air. However, we do not fly with Air Cairo.
The Czech and German markets are often compared, and people say that whatever works in Germany will get to the Czech Republic in a few years too. So, what can we expect? The trends that can be observed already now: much higher interest in holidays in exotic destinations. I think that the travel patterns of Czech and German consumers will converge within the next five years.