Long-haul OTA specialist revises outlook after tougher 2022 than expected

Long-haul OTA specialist revises outlook after tougher 2022 than expected

Firm’s boss Alistair Rowland says it has pivoted to focus on more third-party and lower-priced deals

Blue Bay Travel has revised its three-year goal and “pivoted” its business to offer more third-party and lower-priced deals in reaction to a change in consumer booking habits in the current market.

Chief executive Alistair Rowland said market conditions had made 2022 “tougher” in some ways than the last two for the OTA and tour operator, which specialises in long‑haul holidays.

The company was significantly affected by this year’s “unprecedented” flight disruption, while the weak exchange rate with the US dollar has proved “an unexpected headache”.

Describing September trading as “disappointing”, he said: “Normally September is the ‘second peak’ for the long-haul market.

“We cannot manage the things beyond our control – foreign exchange, an untrusted government, the cost-of-living crisis. All of it is affecting the value of long-haul [holidays]. You have to pivot your business to stay relevant.”

Rowland now envisages the business will reach its targeted £100 million in turnover by the end of 2025 instead of 2024. It expects turnover this year to be about £60 million – still 70% up on last year.
“It’s frustrating but you can’t change customer behaviour,” he said.

Blue Bay has had to adjust prices and offers, switching to lower-priced holidays and different destinations as its normal “value-added” deals fail to secure the expected level of bookings from its 350,000 subscribers.

“Clients are searching the same amount [for deals] but not biting,” said Rowland. “In the short term, we need to accept clients are not booking beyond 12 months; it’s a very price-sensitive market. Our exclusive packages are more about ‘absolute value’ than overall price. But right now it’s all about the overall price.”

The business mix has also shifted. Traditionally, 80% of Blue Bay’s sales are its own contracted deals, but in the second half of this year that has reduced to about 70%.

He added: “We’re adding more third-party stock. It’s right for now but it’s not what Blue Bay is about.”
A third of Blue Bay’s sales are usually for beyond 12 months, but that is down to about 3%.

Rowland expects the rest of 2022 to be “bumpy” but hopes by January consumers will be ready to book.

“In January, the message will be about price, locking it in and added value. Until then, trading will be flat; people are just too worried.”