The cost of holidays could increase by as much as £70 per person next year as fuel and currency fluctuations continue to hit travel companies.
All Leisure Group chairman Roger Allard, who made the prediction at the Barclays Travel Forum, forecast the 10%-15% hike in package holiday costs as major operators reduce capacity for 2009.
“If the big tour operators have hedged fuel and currency, and with the increases in hotel costs, they will need to increase prices by £70 on mainstream package holidays,” he said.
Already average selling prices for this summer’s lates period are around £100 up on last year, he said. Last week Thomas Cook reported average selling prices to be 5% up on last year with 19% fewer holidays to sell this year.
Next year consumers are likely to face even more pressure on their disposable incomes and fewer will travel abroad, he added. “Some demand will fall off and mainstream operators will cut back,” he predicted.
Cosmos commercial and product director Stuart Jackson said: “People who take two holidays a year or weekend breaks, which could be deemed a luxury, are most likely to come out of the market and that will probably affect low-cost carriers.”
The price hikes could mean the best prices will be available for early bookers with fewer discounted holidays in the lates period, he added.
Agents were not overly concerned. Hays Travel managing director John Hays said: “Next year is not going to be easy but I don’t think it will contract hugely. Our passenger numbers are not up but sales values are up substantially and overall commission earnings have increased. If we can replicate that next year it will be okay.”
Miles Morgan Travel owner Miles Morgan agreed: “It’s not doom and gloom and hopefully it will educate people to book early.”