Tour operator boss warns of price hikes for US holidays

The boss of a specialist US tour operator has warned of inevitable price hikes and a capacity squeeze as the destination reopens its doors to UK visitors.

USAirtours chief executive Guy Novik said his business could return to pre-pandemic levels “within weeks” following the decision to allow fully-vaccinated holidaymakers from the UK to travel to the US from early November.

He welcomed the decision, which he said had “caught everyone by surprise”, but cautioned sales could be impacted by rising hotel prices, which had already begun to increase prior to the travel announcement.

He said: “Prices will go up significantly and capacity will go down. There is going to be a capacity squeeze on the more popular hotels where prices will go up because of the strong US domestic market.”

The capacity squeeze would lead the operator to drive more sales to its directly contracted hotels where it has guaranteed rates and availability, he said.

With fewer carriers and smaller aircraft serving the transatlantic route as a result of changes made during the Covid pandemic, Novik warned that flight prices from the UK to the US would also go up.

He said: “The pandemic encouraged the retirement of larger aircraft and replaced them with narrow-bodied aircraft so you now have aircraft with less seats.

“It’s going to take a while for them to reposition and move aircraft back into the market again. There are less players on the transatlantic route and it’s all going to lead to higher prices.”

In addition, car rental prices have gone up in the US because of supply issues with car manufacturers. “As a result, they have pushed prices up to tour operators in the last six months,” he added.

Novik called for more clarity on age requirements for vaccinated holidaymakers to enter the US as the UK government indicated it was confident Britons with two doses of the Oxford AstraZeneca vaccine will be allowed to enter the US once restrictions are eased.

The operator said it was expecting sales to come from three channels: customers with Refund Credit Notes, who could now rebook their holiday; those who are already booked to travel but had expected to have their holidays cancelled and may now want to rebook for a later date; and brand new sales.

He predicted an immediate upturn in sales for Florida in the short term and New York over Christmas and New Year for festive shopping breaks.

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