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Your presenters
Lee JacksonHead of European New BusinessWEX Europe
Martin AlcockDirectorThe Travel Trade Consultancy
CONFIDENTIALANDPROPRIETARY 6
Overviewofwhatwe’recoveringtoday
Brexitareasofimpact
WEXWhitepaperobjectivesandfindings
Areconsumersstilllooking,bookingandtravelling?
Whatdoesthismeanforpayments
CONFIDENTIALANDPROPRIETARY 7
Background2015
TheUKtravelindustryhasbeenprojectedtogrowbyaround4%ayearthroughto2017,however,theindustryisfacingsomemajorchallengeswhichthreatengrowth,includingterroristattacksinpopulartouristdestinations,theongoingrefugeecrisisthatiscreatingtensionwithinEurope,andtheUKreferendumvotetoleavetheEU.
WEXEuropeWhitepaperMay2016
CONFIDENTIALANDPROPRIETARY 8
Background2015
TheU.K.isnowEurope'slargesttravelmarketwith€59billioningrossbookingsin2015,ofwhich€33billionwasbookedonline.Itshighonlineadoptionrateofnearly57%issecondonlytoScandinavia's63%.Asthesetwomarketsreachsaturation,Germany,Italy,andSpainwillbecomethenewgrowthleadersinonlineadoption.
Phocuswright
CONFIDENTIALANDPROPRIETARY 9
WEXWhitepaper
Post-Brexit:ConfidenceRemainsTheKeyToSuccessInTheTravelIndustry,howhasBrexitimpacted:
Thefrequencyoftravelabroad
Spendingontravel
Long-haultravel
Popularityofdestinations
Factorsimpactingplans
CONFIDENTIALANDPROPRIETARY 10
WEXWhitepaper
Smalldecreaseinthenumberofconsumersplanningtotravelabroad2ormoretimesinthenext12months.
25%arenowplanningtotravel3ormoretimes,comparedto35%previously.
Averageamountperpersonhasdroppedby11%.
CONFIDENTIALANDPROPRIETARY 11
WEXWhitepaper
Pre-BrexitMaysurvey,46%ofconsumerswereplanningatleast1long-haultripinthenext12months.
FollowingBrexitthishasincreasedto51%.
Slightdecreaseinthenumberoftripsplannedbythosetravellinglong-haul– 1.9tripscomparedto2.1perpersonpreviously.
CONFIDENTIALANDPROPRIETARY 12
WEXWhitepaper
Capacity- Spainisthedestinationthatmostconsumersplantovisitwith47%.
25%concernedwithitbeingbusyandovercrowded.
WesternMedhotspots,PortugalandItaly,alsofeatureinthetop10inbothourpre- andpost-Brexitsurveys
ConsumersintendingtovisitGreeceandtheGreekislandshasincreasedto40%(from17%previously).
Croatiaisadestinationtowatch.
CONFIDENTIALANDPROPRIETARY 13
WEXWhitepaper
Egypt,TunisiaandTurkeythetop3destinationsthatconsumersdonottointendtovisit.
MiddleEasternandNorthAfricancountriesdominatethelistofdestinationstoavoid.
AlongwithcountrieswherecrimesagainsttouristshavebeenwidelypublicisedintheUKpress.
BrexitisnotkeepingconsumersawayfromEuropeandestinations.
CONFIDENTIALANDPROPRIETARY 17
BrexitImpact:Currency
1.5
1.4
1.3
1.2
1.1Oct Dec Feb16 Apr Jun Aug
EUR per 1 GBP 24 Sep 2015 00:00 UTC – 23 Sep 2016 13:47 UTCGBP/EUR close: 1.15495 low: 1.15236 high: 1.42962
1Y
CONFIDENTIALANDPROPRIETARY 18
BrexitImpact:Currency
1.5
1.4
1.3
1.2
1.12012 2013 2014 2015 2016
EUR per 1 GBP 24 Sep 2015 00:00 UTC – 23 Sep 2016 13:47 UTCGBP/EUR close: 1.15495 low: 1.15236 high: 1.42962
EUR to GBP is not new territory
5Y
CONFIDENTIALANDPROPRIETARY 19
US$ to GBP is unprecedented in the past 5 years USD per 1 GBP 25 Sep 2011 00:00 UTC – 23 Sep 2016 13:56 UTCGBP/EUR close: 1.29470 low: 1.28897 high: 1.71607
BrexitImpact:Currency
1.65
1.55
1.45
1.35
1.252012 2013 2014 2015 2016
1Y
CONFIDENTIALANDPROPRIETARY 21
BASEDONASAMPLEOF70TTCCLIENTS
Touroperators
Source:TTCanalysis
22%Averageprojectedrevenueincreasefor2016/17
CONFIDENTIALANDPROPRIETARY 23
Consumers:Aretheylooking?
Source:GoogleAnalyticskeywordsearch
HolidaySearches
100
1.55
1.45
1.35
1.25Apr’14
120
100
Jan‘14 Oct’14Jul‘14 Apr’15Jan‘15 Oct’16Jul‘15 Apr’15Jan‘15 Oct’16Jul‘15
• Verysimilarholidaysearchprofile
• TherewasanoticeabledipinJune2016
• BymidSeptember2016,searchvolumeshadrecovered
CONFIDENTIALANDPROPRIETARY 24
Consumers:Aretheybooking?
Booked Notbooked
Summer2016SeasonSeasonalmostfullysoldbytheendofSeptember• BookingsareUP4%• RevenueisUP1%
KeyTrends:• FamilyholidaysUP• Shortbreaks(6nightsorless)UP – Consumerstradingdown?• SpainBalearicsandGreeceallshowingDOUBLEDIGITPERCENTAGEGROWTH
• Longhaulalsopositive,UP7%• TurkeyDOWN22%• EgyptDOWN70%
CONFIDENTIALANDPROPRIETARY 25
Consumers:Aretheybooking?Winter2016/17Season
Booked
Notbooked
Winterholidayseasonisusually40%soldbytheendofSeptember.• BookingsareUP17%
KeyTrends:• Shorterduration6nightsorlessUP30%• BigincreaseinSelfCateringUP30%
Booked
Notbooked
SUMMER2017SEASONNextsummerisnormallyaround15%soldbytheendofSeptember.• BookingsareUP5%
KeyTrends:• FamilybookingsUP12%• Shortbreaksof6nightsandunderUP58%
CONFIDENTIALANDPROPRIETARY 26
• InAugust2016,UKresidentsmade9.1millionvisitsabroad,anincreaseof6% comparedwithAugust2015.
• Inthelast12months,UKresidentsmade68.4millionvisitsabroad,anincreaseof7% comparedwiththepreviousyear.
Consumers:Aretheytraveling?
Source:OfficeofNationalStatistics
UK residents’ visit abroad
UK residents’ visits abroad % change from year earlier Expenditure (£ million) % change from year earlier
Non-seasonally adjusted
Aug 2016 9,120 +6 6,070 +10
June to Aug 2016 23,010 +5 14,590 +7
Year to date 2016 47,940 +6 29,180 +9
Latest 12 months 68,440 +7 41,430 +9
CONFIDENTIALANDPROPRIETARY 27
ReasonsToBeCheerful ReasonsToBeFearfulEnquiries andbookingsseemtobeholdingup sofar.Winter16/17 andSummer17
bothmadestrongstarts.
Consumerconfidence hasdroppedbutnottoomuch.
Oilprices shouldstaylowfortheforeseeablefuture.
Airlinecapacity cutscoulddrivepriceincreasesin2017.
CurrencyhasweakenedagaininOctober.GBP:EUROaround1.11andGBP:USD
below1.30.Thiswillmakepricingfor2017achallenge.
Westilldon'tknowwhatBrexitwilllooklike.
Prosandcons
Poll no. 4As a result of Brexit, what changes have you
made to spending for marketing and staff costs? (travel sellers only, please)
CONFIDENTIALANDPROPRIETARY 29
ImpactforPayments
Supporteasiercontractingtoextendsupplierbaseandaccessnewdestinations
Extendsuppliertakeupthroughextendedoptionsforacceptingpayments
Rapidresponsetochangesinresortdemand
CONFIDENTIALANDPROPRIETARY 30
ImpactforPayments
Moredemandforcashflowassistancetosupportbookingcampaigns
Morefocusonsuppliercreditlinesandcreditcontrol
Supportingthecashflowchallenge
CONFIDENTIALANDPROPRIETARY 31
ImpactforPayments
Paymentsolutionsneedtoallowfulltreasurycontrol
Supplierswelcomeeasypaymentswhenacceptingnewpartnersfordistribution
Managingcurrencyfluctuation
Poll no. 5Are you adjusting your payment strategy in the
next 12 months? (travel sellers only, please)
Thank you!WEX Travel whitepaper:http://bit.ly/2fiphmz
Send your questions and comments to [email protected]
Replay and presentation will be available on www.tnooz.com