February 9, 2012
Guest blog by Simon Tregoning, Chairman of Classic Cottages
Tourism and schools are subjects upon which most of us feel able to offer an opinion because we all went to school and most of us go on holiday. So, putting the two together, it is easy to understand the temptation faced by Government ministers to occasionally seek favour by bemoaning the ‘exorbitant’ cost of getting away in the school holidays. They might be surprised to hear that I share their concern but I am sure that they would be disappointed to discover that the solution lies in their hands, not ours.
Squeezing families’ holiday opportunities into the same few weeks a year creates an artificial imbalance in the supply and demand for holidays. The laws of the market then take hold and prices increase with higher demand and drop as it slackens. The price increase is not just profiteering by the holiday industry, but driven by a need to earn more income in the short period of high demand to offset the low demand during the shoulder periods.
The negative effects on the customer are obvious, with higher prices and less choice for the peak periods. But the consequences of the current policy go beyond a simple distortion of the market. The annual influx means that we have to plan our transport links to deal with the periods of demand that only last for a few weeks of the year or suffer congestion that is a real threat to the success of our industry. The same applies for all our services, from water and sewerage to beach safety and the hospitals. Environmental impact would also be easier to manage if the same demand was more evenly spread through the year.
Tourism operators also have their own concerns about this market distortion. Just like any other industry, we only survive if we satisfy our customers and having our best customers facing less choice, higher prices and congestion only makes it more difficult to encourage them back in the shoulder periods. Those of us with 100% occupancy during the summer school holidays know that we could hike our prices even higher and make more profit in the short term, but we don’t because we need to keep our customers’ loyalty to fill the quieter periods.
Other European countries stagger school holidays by district in order to overcome this market distortion and that seems to make very good sense. Stretching the period of peak demand flattens the price curve, gives the customer more choice and eases congestion. This wouldn’t be popular with every operator, however. Those that hang out the vacancy sign for a few weeks of the year knowing that there will always be custom would find life more difficult when the same peak season demand was spread across seven or eight weeks rather than five.
Yet that simple action could have a considerable impact on the general standard of accommodation in the UK. It is not surprising that more customer complaints come from the ‘school holidays only’ sector because short-term operators do not earn enough to justify investing the time or resources into improving their product from one year to the next. Spreading the peak demand period would make it more difficult for these operators to take advantage of the market distortion and would remove a source of some of the industry’s worst complaints.
Any such change would obviously have to have the support of schools. The education of our children must be the first priority. I would not presume to know all I need to know on this topic and must be guided by the experts. However, spreading the holiday-taking period must surely make parents less inclined to remove their children during the term time.
The staggering of holidays needs only to be for two or three weeks in the summer and one or two weeks for the rest of the year to have a significant impact. It would stretch the Christmas, Easter and half-term periods as well as the summer, which would allow the tourist industry to employ more people year-round – and that, in turn, would provide the incentive to train staff and give them a proper career path. So, when our young people leave school, they could continue to progress in well-paid jobs which would give them a sound future.