TNW pick of the week: January sales boom!

The retail trade is reporting a healthy start to 2013, with some agencies saying January sales are the best they’ve seen in a long time.

“Bookings and profits are up,” says Bronwyn Philipps, md of Rennies Travel. “We’ve had a really good January, following a December that was better than the previous year.”

Wally Gaynor, md of Club Travel, agrees, saying it has been a trend for the past few months. “We had the best December in years and January is looking great as well.”

Travel Counsellors SA is 9,1% up on passengers, 15,5% on bookings and 27% on revenue compared with January last year, says director, Will Puk.

Flight Centre also reported growth in January sales, particularly in the last two weeks of the month. “Overall, it’s been a good start to 2013 with company profits up by 12% compared with last year,” says Janine Salame, md of Flight Centre SA.

Jonathan Gerber, director of TAG, says although January was still not a “great” month in terms of the past 12 months, trading was way better than the previous year.

Garth Wolff, ceo of eTravel, also notes an increase in quotes and bookings for January. “There has definitely been an increase in travel plans and travel spend.
“The world economy has definitely bottomed out and corporates are sitting with piles of cash, which they have now decided to invest, leading to projects and expansion,” he says.

The reasons

Jonathan believes the early start to the year may have helped things. “Schools went back a week earlier this year and most businesses had people back at work, therefore bookings may have come in sooner. Also, January had 22 trading days, as opposed to 21 last year, which is a 5% increase on its own.

“This time last year we were smack in the middle of the economic slump, which has improved somewhat. There is, overall, a positive sentiment in the corporate sector.”
Bronwyn notes that there has been an increase in incoming business, specifically Africa, as well as an increase in client incentive travel and corporate strategic planning events and workshops. “Corporate clients seem to have started travel earlier in January than usual,” she says.

Preparation for elections has also boosted sales, she adds, and certain industries have seen an increase in travel. “Afcon contributed to January specifically.”

“Quite frankly we don’t know why sales are up,” says Wally. “One of the reasons mooted is that the stock market is high and people are cashing in shares and travelling; another is positive sentiment that the economy will improve later in the year.”

Will says people have money to spend and want to get their trips booked and paid for before the rand devalues further. He adds that there has been a huge rise in leisure business.

For more on this story refer to TNW February 13.