Pressure on prices intensifies as demand increases for ‘safe’ destinations

The trade says pressure on prices for peak summer breaks in the western Mediterranean is intensifying as demand increases for “safe” destinations.

 

Travel agents reported prices had started to rise for destinations including Spain and Portugal.

 

Idle Travel owner Tony Mann said: “Some western Med prices have risen for May compared with a couple of weeks ago.”

 

He highlighted consumer price sensitivity, with the agency’s year-on-year sales down 40% for March 1-17, adding: “Operators need to be careful not to put people off altogether. With everything that’s going on and the news in relation to fuel, anything can easily put people off taking their holiday. Business is dire.”

 

More: Trade’s rebooking efforts shift to customers beyond Gulf

 

The Holiday Shop director Marina Marsh said the shift from Cyprus and Turkey to the western Med meant prices had “started to go up a little” for summer and warned of a lack of cheap deals in lates.

 

She added: “The late deals might not be there this year. Chances are the holiday could be gone or go up in price due to tight availability.”

 

Janet Lacey, personal travel consultant with Not Just Travel, agreed “even better late deals” would “probably not materialise” this year. She said increased demand for Spain, Portugal and Italy had led to a “firming of prices rather than a single, dramatic jump”.

 

She noted: “Prices to the western Med were already under pressure from strong demand, and the conflict has added another layer of complexity and worry.

 

“On the ground, that’s showing as higher flight prices for peak dates into the western Med than we’d normally expect at this point in the year, and less deep-discounting on late summer and Easter than you might have seen a few years ago, because aircraft are staying full. For families comparing with two or three years ago, it absolutely feels like a step up.”

 

Cruise Monks managing director Wael Seliman noted price rises in “safer” destinations were yet to reach levels where they were “putting people off”.

 

He said: “At the moment, customers are more focused on peace of mind than saving every last pound.”

 

Advantage Travel Partnership said there was “no hard evidence” of widespread price increases “at this point” but commercial director John Sullivan admitted: “As we move closer to the Easter and summer holiday periods, availability and capacity will tighten, which could place upward pressure on pricing.

 

“Ongoing geopolitical uncertainty, combined with fluctuating oil prices, adds a further dimension of unpredictability for consumers. In any environment where supply and demand become misaligned, some degree of price movement is to be expected.”

 

The price fears came as Jet2holidays chief executive Steve Heapy revealed he was warning western Med hoteliers against “getting greedy and putting rates up”. 

 

Ted Wake, managing director of short-break specialist Kirker, said the operator had yet to see price rises but warned it was “definitely the wrong moment to be profiteering”.

 

He added hotels, particularly in Italy, had approached the operator with new contracts following weaker demand from the US inbound market.

 

Planet Holidays said prices in Greece remained stable but said some hoteliers were delaying opening from the start to the end of April while hoteliers in Cyprus were extending early booking discounts.

La Vida Travel director Karen Marin Reyes said she had seen "a significant increase in pricing" for selected European resorts when looking for alternative destinations for clients.

"Our clients’ main concern now is finding an alternative destination that still offers a similar level of luxury and guaranteed sunshine at this time of year," she said.  "This becomes a little easier later in May and into the summer when Western Europe enjoys more sunshine."

However, she said the agency’s "biggest worry" was not over pressure on pricing, but "limited availability" in peak travel months.

Reyes said clients still want to travel abroad given the "grey start" to the year in the UK, but added: "For clients with a set budget, we need to be transparent about what their money will secure this year, as there may be fewer destinations available that still meet their expectations."