Post-Brexit currency shock prompts fears of cancellations

UK consumers are adjusting their summer holiday plans, with 3% even opting to cancel in the wake of the Brexit vote.

That is according to travel deals publisher Travelzoo, which is warning of higher costs ahead in the price of holidays.

It carried out a survey on holiday attitudes in the week after the referendum result.

At that time, the pound had sunk in value against the euro and was at its weakest against the dollar since 1985 – down by 11% – following a rush for holiday money as people looked to make their cash go as far as possible abroad. 

Sterling hit new 31-year lows against the US currency early on Wednesday.

Travelzoo said the plunge in the value of the pound was the core reason for 3% cancelling trips – a number it described as “minimal” – though 9% of all respondents admitted concerns about being treated negatively abroad in light of the EU vote, Sky News reported.

Travel firms agreed interest in all-inclusive breaks had spiked for destinations worldwide – not just in Europe.

Travelzoo said 26% of the people it questioned were now actively considering all-inclusive options, with the US remaining popular despite the currency issue.

It highlighted concerns in the industry for the future – with the risk that foreign destination contracts for next year will cost operators more to buy – with those additional costs being passed on to UK consumers in the form of higher prices.

Holiday firms have the power to raise surcharges on breaks by up to 10% to cover higher costs but it is understood few have imposed such a move yet or intend to in the short term.

UK managing director of Travelzoo, Joel Brandon-Bravo, urged the government to act now in support of the holiday industry and consumers amid the uncertainty ahead.

He said: “If they react slowly, and tourism is pushed down the list of priorities, British holidaymakers could be facing more expensive overseas holidays, and consequently we could see a dip in travel.”

He added: “The fall in the pound will take time to filter through into higher costs for flights and cruises but a sustained lower pound will eventually cause a price hike.”

Operators, including Thomas Cook, told Sky News they were seeing no real evidence of cancellations – with such a move often risking the loss of money and the complete cost of the holiday in may cases.

A Thomson and First Choice was reported as saying: “We have not seen any signs of consumers putting off booking their holidays and our summer and winter holiday programmes continue to sell well.

“People still want to get away from it all and spend time with their families as normal, to recharge their batteries and get some sun and adventure.

“And as more than half of our holidays sold in the UK are all-inclusive, these customers don’t have to worry about currency impact on in-resort spend.”

Abta said: “While consumer confidence more generally may be knocked by the political uncertainty following the (EU) vote, most holidaymakers will have made their summer plans already, and the latest industry figures show that the market is up 5% year on year.”

It reminded travellers there would be no change in their rights and travel rules until such time as the UK officially leaves the EU.

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