The Holiday Industry and Exchange Rates

The credit crunch is over the worst and a gradual recovery is being made. However, it doesn’t mean that we won’t feel the effects for quite some time. For the consumer, there will be advantages to that as certain offers may continue to remain for the foreseeable future. The holiday industry has been forced to make its share of offers in these turbulent times. The exchange rate has had a dramatic impact on the industry as a whole.

Whilst most of the world regions were affected either with a loss or only a tiny profit compared to what they would normally make, the hotel industry too were having to offer deals galore to encourage holidaymakers to continue travelling.

The airline industry were perhaps affected even more with fuel prices changing all of the time. The exchange rates were affected also with the global economy being an overall victim in this. The market was already turbulent but this sunk it into al all-time low. We began to see mergers between major companies being forced to make such moves in light of the economic situation within the industry meaning that the credit crunch will have made a lasting mark upon the industry no matter how well it recovers.

UK travellers were majorly affected by the exchange rate. They had already found themselves in a situation where they had to watch how much they were spending but now they had to look at their holidays differently. They were not as quick to leave that off their list of outgoings as other items as the Summer holiday is a major ‘want’ for the Brits, keen on exploring other, perhaps more sunnier, climates. There needs were met by budget airlines and actually those airlines were performing better, financially, as their expenses were not in the same stratosphere as the likes of some its major competitors in the industry.

Flag carriers were affected more than any other sector of the industry which was a direct influence from higher fuel costs. Major airlines such as British Airways lost a substantial amount of money having been forced to cut costs.

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