… With Confidence

So, are we still confident? Amidst the talk of a one-fifth slump in the share price of Marks and Spencer yesterday, was the news that TUI (UK)’s share value had gone down by 14% as well.

This is The City getting the jitters. It is getting the jitters about consumer spend. It is getting the jitters over the possibility of recession in the UK economy. The R-word. It looks almost inevitable in the USA, which drives everyone else’s economy; it could be on the cards in Europe, too. Furthermore, the increased costs of energy in the UK are mirrored elsewhere; in Spain for instance. Butane is up over 5%; that’s above inflation.

The City doesn’t always get it right. There is irrationality as well as rationality, but the tumble in TUI share value is an indication of confidence, or rather the lack thereof, especially in the leisure sector. Those predictions of an excellent 2008 might not prove to be sound after all. In fact, the word is more that it could just be normal.

As of the end of last year, the volume of sales from the UK for Mallorca was down by 20%, though this situation – it is believed – will regularise itself and end up being like last year. So, on the one hand you have the hope that it will be normal and on the other that it will be like last year (which was excellent in terms of volume). The other thing that is making the situation a tad dodgy is the exchange rate between the pound and the euro.

I fancy that TUI will be ok and I don’t believe the 2008 holiday market will go into meltdown. The big two are currently in a promotional frenzy with a free day being included in offers. But the spend is going to be another thing. For businesses here, those local price increases – for butane, electricity, telecoms – are additional factors. Throw in a quasi-recession in a key tourist market, and things do not necessarily look that glowing for 2008. I hope I’m wrong.


MAKING CONTACT
Just a reminder please to come through to me at the email address below. I have a comment for an entry way back from a lady called Katie, which would be nice to reply to, but the problem is that entries via the comment box are usually anonymous, so I have no email address to use in order to reply. Katie, if you’re reading this, it was your comment about Dakota. Thanks a lot.


QUIZ
Yesterday – it was Havana and the author was Graham Greene. Today’s title – the first word in the title should be “Kissing”. Who was responsible for this odd record?

(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)