Back to school...

As the autumnal clouds gathered and the tops of the trees began to bend in the wind, Natalie delivered another unique insight… ‘It’s back to School weather’ she said. 

Despite not having gone back to school for the last thirty years, there’s still something about the changing weather and the shorter days that triggers an association with the new school year.  I suddenly have an irresistible urge to buy a new compass set from W H Smith and to back my books with woodchip wallpaper.

For the Travel Industry, it’s not New Year when we reflect on the year just gone; it’s the start of the new school year.  We say goodbye to the kids at the school gate breathe a sigh of relief, then head straight to the office to digest the numbers and review the margins.  Summer’s gone, it’s time to take stock and plan another year.  Groundhog Day.

But this time round it all feels a bit different.  When Millie (aged 6) started Big School last September the financial world was in turmoil.  Within a week of her starting, Lehman Brothers had gone bust and before the end of her first term property prices in the UK had tumbled by 15%.  (In fairness to Millie, none of this was her fault; in fact she was far more worried about the big girl in Class 3 who stole her pencil sharpener.)

A year on and unbelievably all the talk is of planning for recovery.  House prices have stabilised and consumer confidence is improving.  Retailers are reporting year on year sales growth and the banks are once again dishing out bonuses.  We can all breathe a sigh of relief.

It’s worth remembering though that recoveries don’t always put you back to where you started.  The world of sport is littered with come-backs that didn’t quite live up to the former glory (think Lance Armstrong), not to mention the world of entertainment (think erm…the Spice Girls).

Your customers have changed.  Last month consumer debt in the UK shrank by £650m - after years of living on credit we’re now paying the bill.  Over the next twelve months, millions of rock bottom variable rate mortgages are going to come to an end and your customers are going to find themselves paying nearly 5% interest on the best fixed rate deals.

This will not be a recovery back to where we were; this will be a recovery to a different place.  A place where your customers will think much harder about how much and how often they spend; where they will save before they spend; where above all they will demand value for money.  This is the new reality – nothing’s changed but everything’s changed – and only those businesses that recognise the subtle differences will share in the recovery.

It’s back to school weather, Millie has a new pencil sharpener and the big girl in Class 3 is now her best friend.  Plus ça change, plus c'est la même chose.