The charter industry is under pressure

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Around one million Danes go on a charter holiday every year. 2015 indicates fewer guests in Denmark. Both Copenhagen Airport, Billund Airport and Aarhus Airport report a decline in charter flights this summer.
Dr. Ana María Munar
Dr. Ana María Munar, Associate Professor, Copenhagen Business School.

“Charter Agencies with simple travel, which alone make flight and accommodation will have difficulty competing. The charter industry is under pressure. The way they can survive is to differentiate them, to develop their products and give some extra value in relation to that people are now more self-advocate and organize their own travel,” says Dr. Ana María Munar, Associate Professor, Copenhagen Business School.

Ana María Munar holds a M.Sc. in Political Science and a Ph.D. in Economics and Business.

Around one million Danes go on a charter holiday every year. 2015 indicates fewer guests in Denmark. Both Copenhagen Airport, Billund Airport and Aarhus Airport report a decline in charter flights this summer.

“I think that the traditional charter holidays will go back in Scandinavia. This is due to several trends.”

“People can easily buy themselves and arrange their own travel. Some years ago, budget airlines came, while it was difficult to buy a cheap accommodation. But now you have many OTA´er (Online Travel Agents). It has changed the competitive conditions. The second trend is the economy parts. Airbnb is one example, and Couchsurfing another, where you can stay free in another city.”

“These popular online platforms have the benefit of a snowball effect that will roll more and more,” says Ana María Munar to TTO Scandinavia.

“Charter organizers have strength, if they have deep knowledge of a destination or if they make special trips. It can be Operatours, Gastronomy, Birds, Wine, Senior Travel etc. Or if people are busy, pay, and just want the whole package without even having to think about how the trip is arranged. They will have an easy trip.

Some charter organizers have moved in the right direction. But they will only have a chance if they provide an added value of the journey, if there have other types of products. People want to arrange their own trip, and it has become much easier in recent years with advances in technology. But people will only arrange the trip, if they have a reasonable knowledge of the destination or they do not take excessive risks. People can go to a charter agency to Crete or Portugal for the first time, and then the next time arrange the trip. It will be a little harder on a trip to Vietnam or other lesser-known destinations,” says Ana María Munar.

Lower price

“Charter holidays will continue, but the competition is strong. It is due to the fact that many prefer more flexibility and own influence on achieving unique experiences. It is why still more order their own tickets on the internet and often prefer airbnb to classical hotel service, “ Lise Lyck, lecturer CBS says.

“But also quite a lot want experiences related to specific themes. It can be football, culture events, world heritage, shopping and a lot of other themes. If the charter travel companies are following the consumer trends in relation to themes they can compete buy offering focused products at a lower price than if people themselves have to arrange the frames for such activities. However, there is still a motivation for many to enjoy more traditional charter travel products especially to countries with a lower price level than the Danish price level and when the weather has been disappointing in Denmark.”