Jet2.com and Jet2holidays boss Steve Heapy has warned of the likelihood of holiday price hikes across the market for summer 2023 due to the increased cost of living.
Speaking on the second day of the Hays Travel Independence Group 2022 conference in Tenerife, Heapy told travel agents it was more important than ever to get clients to book early for 2023 before prices were impacted.
Major travel companies have hedged fuel prices for this summer and have hotel contracts in place for this summer, making price hikes unlikely for this summer, he said.
He said: “We have not seen holiday prices go up that much [currently] because hotel contracts are in place. We contract well in advance.
“Jet2 is hedged for fuel for this summer regardless of what happens to the prices. Therefore, prices will not be affected for this year.”
But with rises in the cost of living likely to “be here for a while”, prices for next summer were likely to be affected, he said.
Household energy bill rises of 54% kick in from April 1 while food and petrol costs have already gone up.
Heapy said: “It could be next year you see price increases because companies are only hedged by a small amount around fuel. They are hedging at much higher rates and prices will have to go up.”
Hotels will also be reviewing their rates based on increased costs of food and higher taxes over the coming months, he said.
“We will see inflation start to bite in summer 2023 prices,” he said, adding: “We should all do what we can over the next few weeks to get as many bookings in for summer 2023 as possible.”
Some companies have already announced plans to introduce surcharges for this year to cover the increased cost of fuel but Heapy ruled that out for Jet2. “We would not do that to our customers,” he said.
Heapy also warned of the danger of the UK entering a ‘1970s price wage spiral’ in which wages and inflation continue to push each other up.
“You get into a spiral that is difficult to get out of. We need to be careful. Inflation is starting to bite and in the next few days fuel bills will go up,” he said.