Package Holidays: Price-hike In 2010?
Is it the end of the cheap package-holiday deal
? There has been much speculation that prices for 2010 are going to take a steep rise, leaving consumer confidence at an all-time low.Holidays are the luxury many look forward to throughout the year. It's the time when we can escape work or our day to day routine. Unfortunately, it's just a very small chunk out of the year. For some, it takes a year of saving-up for a one or two week break, on top of paying bills and the rising cost of living. So there it is, price is very much the deciding factor when it comes to the make or break of going away.
Another prominent factor evident this year is the tightening gap between the British pound and the euro. Many destinations using the euro as their currency have become increasingly expensive, with destinations like Spain and the Canary Islands seeing a substantial decline in British tourists. Historically, tourists have gone away expecting to pay less for food and drink than they would do back at home.
This year the rise of inflation has contributed to one British pound being practically equal in value to one euro. With exchange rates becoming less competitive, it makes sense that people are either forfeiting holidays abroad or taking cheaper breaks in Britain.
This year, the Travel Trade Gazette revealed that the average price of going away this summer was pushed up by 26 pounds to 564 pounds. In the height of a recession, it's clear to see that the cost of travelling was more likely to put people off taking the escape more than ever. With the travel industry losing huge profits, travel companies and airliners going bust - it seems like a never ending battle.
More than ever, those who are still in need of that summer getaway are shopping around over the internet to try and secure that holiday bargain. This year, the anticipated price-war between travel agents appeared to be non-existant and meant that major high-street agents takings had dropped. It is fair to say that the decrease in bookings and consumers taking their business elsewhere has led to travel companies having to hike-up prices to cope with plummeting profits.
A report by ABTA suggests that overall leisure travel was down by 11 per cent, and that companies have cut the number of cheaper holidays in the 200 pounds-to-399 pounds per-person price range. For many, this becomes a stumbling block as these price ranges are particularly popular and sought-after by all travellers.
The Mail Online reported that particularly in peak-seasons and school breaks, holidays can be almost 4,000 pounds more than the same trip a week later. Research by the Santander credit cards group found astonishing price differences for a family-of-four getaway inside and outside school holidays and half-terms. It questions how travel companies can justify such a huge fluctuation in price, and really demonstrates two main things. Travel agents are possibly trying to recoup lost profits by exploiting their target consumers, and it also demonstrates that shopping around is even more essential than ever.
From our own research, the average price of a one-week getaway in Majorca in August 2010 for a family of four averages around 2,500 pounds on a half-board basis. The same holiday before the start of the summer term is on average 500 pounds cheaper. So, how can travel agents justify such a difference in how much they charge, and does this mean families who already struggle financially will be abandoning the getaway abroad?
In the last year or so, there has been various coverage in the news of families deserting their usual european escape and setting-down in the UK for a week or two. British holiday destinations such as Brighton, the West Country, Blackpool and the Isle of Wight have once again become increasingly popular as holiday destinations.
So, what does this mean for the travel industry and for consumers? If the major holiday companies keep raising prices beyond ridiculous amounts, it's only clear that more consumers will seek alternatives. Whether it be shopping around over the internet and avoiding high-street agents, avoiding packages by tailor-making their own arrangements, or staying in the UK and hitting one of the beauty-spots - profits look to decline for the travel industry.
For consumers, it looks more promising. With a range of options and travel companies, it won't be long before the industry has to make changes to their extortionate prices to restore consumer faith.
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