Finance / Holiday prices likely to rise after sterling slump, british travellers warned
Holiday prices likely to rise after sterling slump, british travellers warned
12 June 2017
British travellers should prepare to shell out more for holidays booked through Thomson owner Tui, which is set to pass rising costs onto customers following the pound's collapse.
Tui chairman Klaus Mangold told the Press Association that despite attempts to hold costs steady, pressures on margins - linked to the weaker currency and rising destination costs - will mean prices for British customers are likely to rise.
"We are trying to avoid this, but sometimes we cannot avoid it," he said in an interview in St Petersburg.
"Italy, Spain, Greece, are increasing their prices so they (UK travellers) are suffering two-fold.
"One is by the currency issue and secondly is the increase of price in the country of destination.
"So you have to compensate it and I believe that we are making major efforts to do this and to make sure that ... we can offer our customers a reasonable pricing as far as destinations are concerned."
When asked whether the price hikes could come within the next year, Mr Mangold was cautious about giving a forecast.
He said: "But it's a very limited number. So it's not something where we say 'Okay we have to give everything to the customers which is linked with increases in prices, which we are taking on as well'."
The chairman said the company has already noticed Brits taking shorter holidays as a result of rising inflation, with vacations cut down by two to three days on average.
But Europe’s biggest tour operator still managed to post a 3.3% rise in revenue for the six months to March 31 to 6.38 billion euro (£5.4 billion), noting that British bookings had remained “resilient” despite Brexit.
It helped half-year losses narrow to 308.6 million euro (£261 million), an improvement on the 394.9 million euro in the same period last year.
While demand for travel to Turkey and North Africa remained subdued in the wake of terror attacks, Mr Mangold said Tui’s staffed travel agencies had helped secure revenue by directing travellers to other sites under the Tui umbrella.
“A company such as ours, which has invested a lot over the last five years in hotels, and in aircraft – to put it in a general way in fixed assets – is much better off to shift, as well, our customers potentially from one country to another if needed,” he said.
“And so I believe this is an advantage that we have.”
He added: “Especially in times where people are suffering from terrorism, say are looking forward to having some advice, if they can talk to somebody in the travel agency, it gives them a certain degree of comfort.”
Asked whether terror attacks might deter tourists from coming to the UK, Mr Mangold said he did not believe there would be a long-term downturn.
“I believe in countries such as UK, and we had this as well in Germany, in Berlin, people are shocked but they are confident … (that the country) can resolve those issues,” the chairman explained.
“Certainly bookings will go down, but as a long-term trend, I believe it will not (have an) affect.”
Rui Vieira/PA Wire