Is the travel industry being affected by the credit crunch?

Since the last financial recession, the UK and the rest of the world has basked in easy credit, low costs, consumerism and the notion that the good times were going to run and run. The bad news however is that these times of, some would say, financial frivolity are well and truly over and in their place is financial instability and debt. As more and more businesses go in receivership each day and people lose their jobs the purse strings are being tightened and people are having to cut back on certain luxuries that they have come to expect – and one of those luxuries is travel.

Holidays were once seen as an essential part of life with people working all year to afford their well deserved break in the sun, but now since the financial tide has turned things are looking very different. Gone are the times when an expensive holiday could be put on a credit card and paid for at a later date as people can no longer afford it. As a result the travel industry is seeing the number of people who are booking holidays is falling and many agents are dropping their prices accordingly.

This however can be seen as good news for those people in the middle classes who have traditionally had more disposable income then the lower classes. For these people holidays and travel is actually becoming more affordable as prices drop. This is even more evident when you look at the number of people who are now booking their holidays online as opposed to through a high street travel agent. Online travel companies have the upper hand in times of financial instability as they typically have fewer overheads than high street travel agents.

In addition to this travel businesses that use software that can be used online are finding that they are reaping the rewards as they can now, in effect be open 24 hours day. Thus making full use of the online booking and ordering that the internet brings. So in essence even though the travel industry is being affected by the credit crunch it is not in the same dire straits as say, the mortgage or loan industry who are losing millions. People still want to go on holiday and travel, they are just having to rethink where they go and how much they can spend and this is resulting in last minutes deals being snapped up and taking the lions share of the industry at the moment.

It might not necessarily be the right time to start up a new business in the travel industry but it is not the end of the road for those in the business who have planned ahead. Holidays might be seen as a luxury, but they are one luxury that most people still strive to afford for themselves.