Tourists Still Holidaying Abroad This Summer
Tourists are still travelling, that is the message being given out by some of the travel industry’s leading players. Despite the doom and gloom in the press and on the TV it seems that all may not be heading south in the worldwide economy. Owners of property abroad should still look forward to a summer of holiday rentals.
Leading travel company Thomas Cook released a statement demonstrating that despite the credit crunch it has seen little fall off in the travel sector of late, with UK holidaymakers determined to bag their week or two in the sun this summer.
Interestingly the company is still on track to reach year end profit forecasts despite the marked downturn in the worldwide economy - summer sales are going to plan and winter sales are “encouraging”. Part of the reason for Thomas Cooks stellar performing is largely down to its management of supply and demand. This has not only led to a large drop in the number of discounted holidays, but it has also seen a 3% increase in the average price of a UK holiday.
While it would be foolish to claim that the tourist sector is recession proof, it does seem to be reacting a little quicker to the current situation. Whether the internet has assisted the companies in identifying the need to cut back capacity or they just manage their markets very well remains to be seen. The ramifications for the overseas property market are directly attributable to the global tourism economy, which can mean one of two scenarios.
“As in the UK, many of countries within the Eurozone are seeing property prices come under pressure with more people looking to offload than a year ago.” commented Chintan Mahida, an overseas property analyst from Nubricks.com. “When you consider this, in addition to the fact that tourists are continuing to visit popular holiday resorts in large numbers, there is the opportunity for some overseas property investors to pick up long term property investments “on the cheap”.”
Property buyers who have already invested abroad are benefiting from increased demand for long-term rentals as potential buyers looking to ‘try before they buy’. With Thomas Cook reporting good things for this summer tourism should bode well for demand for short term holiday lets abroad and is a positive sign for owners of holiday homes.
The tourism market has always been vital to property markets around the world, but few would have guessed it would prove so resilient for so long.
Sarah Chambers said,
May 23, 2008 @ 11:57 am
Statistics from holiday home rental website Holiday-Rentals.co.uk support the observations above. So far in 2008, the site has experienced a record level of traffic and booking enquiries, showing demand for short-term holiday lets is strong and growing, despite the credit crunch.
With the average occupancy rate for holiday homes in Europe 18 weeks per year, and the average rental rate per week around £600, owners of holiday homes can potentially achieve average annual returns of around £10,000.
As British tourists increasingly look for great value, quality accommodation online, the idea of renting a private holiday home direct from the owner is becoming a mainstream travel option for many. Stats from industry analyst Mintel show that self-catering holidays are growing at a faster rate than overseas holidays in general and that nearly a quarter of all overseas holidays are now taken in private holiday homes.
This is indeed great news for holiday home owners who are looking to cover some of their borrowing and maintenance costs with rental income, or indeed, simply generate a valuable second income.