Window pains: Late bookings and the challenge for travel brands

Did you know a record 459,288 fines were issued in England last year to families who took children out of school during term time to avoid higher holiday prices?

It’s not hard to see why. As soon as schools break up, prices jump overnight. A holiday which felt affordable the day before suddenly isn’t. It’s no wonder some parents are happy to stomach the £80 fine if it saves a few hundred pounds.

Other than taking your kids out of school (we listen and we don’t judge), families have two strategies to secure a cheaper holiday: book early to secure availability, or wait for a late deal.

That choice pretty much sums up how booking windows are shaped.

The forces shaping when people book

As we know, school holidays are one of many factors influencing pricing structures and, therefore, booking windows. But it’s the industry-wide pricing practices - dynamic pricing, discounting to fill unsold capacity and promotional periods, such as Black Friday - which have and are shaping customer behaviour.

This, in turn, has contributed to a growing reliance on late bookings and shorter booking windows across the market.

Booking later - the ‘new normal’

Across the brands we work with, shorter booking windows are becoming harder to ignore.

Industry data points in the same direction. Expedia has recorded a rise in searches within the 0 to 13 day planning window, particularly for international trips, and Net Affinity reports that more than a quarter of bookings are now made within seven days of arrival. Even where travellers plan further ahead, price, weather (particularly relevant to UK holidays) and perceived value continue to influence when they commit.

How travel subsectors feel the squeeze

When demand arrives later in the cycle, brands have less time to influence decisions, and there’s increasing competition at the point of booking - which will increasingly be a price-led decision.

If late bookings are affecting your brand and subsector, you may be reassured to know they’re affecting the wider industry too.

Accommodation, tour operators and attractions

The thing with rooms is that if you don’t sell them for that night, that revenue is gone forever. You can’t resell yesterday. It isn’t like stock sitting in a warehouse that can be sold next week or next month. Travel has the ultimate sell-by date. Once the date passes, so too does the opportunity.

That reality is why discounting becomes the last lever to pull. Some revenue is better than an empty room, even if it comes at a lower margin.

In that last-minute window, acquisition costs climb too as providers compete for the same pool of deal-hunters. Decisions are price-led and differentiation becomes harder.

Shorter booking windows also make life difficult behind the scenes. With less forward occupancy visibility, staffing, supplier commitments and pricing decisions all become harder to plan, and revenue becomes increasingly volatile.

Coach tours, cruises and multi-component trips

Trips like these often rely on hotels, restaurants, excursions and transport being organised well in advance. But when passenger numbers are confirmed late, there’s less room to adjust plans or negotiate rates, and margins shrink as a result. Operational planning also becomes more reactive, with less flexibility to optimise costs.

Cruise and escorted touring have learned to live with this to some extent. Offers have long been used to fill the final cabins or places, so a portion of late demand is expected.

Transport providers

Transport, conversely, plays by slightly different rules. Airlines and rail operators have spent years conditioning us that leaving it late usually means paying more. Most travellers have learned that lesson at least once!

The result is more people booking earlier, which gives operators a much better sense, weeks or months out, of how full a flight or train will be and what revenue they’re getting.

Late demand does still exist, particularly for short-haul, domestic and discretionary trips. But even in sectors that reward early booking, there is always a portion of demand that arrives late.

Premium and specialist travel

Higher-value and specialist travel is generally less exposed to late booking behaviour, as customers tend to plan further ahead to secure limited or distinctive experiences. Booking curves are often steadier as a result, and pricing usually holds more firmly.

These segments are still influenced by economic conditions, however. When confidence dips, decisions may be delayed, which can slow momentum on bookings even if behaviour does not shift to true last-minute purchasing.

That said, when global sales events such as Black Friday occur - you see consumer behaviour change in anticipation of potential savings - whether they are available or not.

Some trips will always be booked late

In some parts of the market, booking late is simply how customers behave. Short breaks and city trips are a good example. They are easy to plan at short notice, so decisions often happen closer to departure - and perhaps the where is less important than the escape itself - and as such price/value becomes a bigger consideration. Paris vs Barcelona vs Copenhagen….all offer a great weekend escape so consumers can be more destination agnostic.

Weather-dependent trips, such as skiing, show similar patterns, with customers waiting to see what conditions look like before committing. In highly price-sensitive parts of the market, like budget package holidays, low-cost city breaks or domestic trips driven by deals, many travellers are actively watching for offers, which naturally pulls bookings closer to departure and increases competition in the final sales window.

Reframing the booking window

Unless your brand is attheverylastsecond.com (or other similarly named providers) then short booking windows are likely to negatively impact you in some way. The question is, what can you do about it?

In this series, we’ll look at the levers that can help extend booking windows, reduce the scramble to fill gaps close to departure and give your brand more room to influence decisions and protect margin. Late demand will always exist, but relying on it doesn’t have to be the default.

We’ll also explore how to minimise reliance on discounting, how to build demand earlier, how to secure more bookings at full price and how to strengthen perceived value without cutting margins. Finally, we’ll look at sectors and brands which have managed to avoid heavy discounting, and what their approach can teach the rest of the industry.

If short booking windows in the travel and tourism sector are causing your brand a fair amount of pain, there’s still time to ease the pressure, especially before the summer season ramps up. Stay tuned for the rest of this series, where we’ll look at practical ways you can influence booking behaviour and broaden your booking windows.

And if you can’t wait that long, and this is something you’re grappling with right now, get in touch. We’re always happy to talk it through.