Why holiday costs are set to go up this summer

International holiday costs are set to rise this summer due to pent-up demand and fewer aeroplanes in service. Read on to find out more.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Aircraft wind on the sunrise sky background.

Image source: Getty Images

If you’re planning an international getaway in the near future, be prepared to shell out more cash for your trip. The boss of travel website Booking.com predicts that holiday costs will go up this summer due to a combination of pent-up demand and reduced airline capacity.

Here is what you need to know.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Where can I go on an international holiday?

After close to 20 weeks of a blanket ban on international travel for leisure, people in England will be allowed to go on holidays abroad from 17 May.

However, travel is limited to a dozen countries on the government’s green list, including the likes of Portugal, Israel, Iceland, Australia and New Zealand. It’s important to note that not all countries on England’s green list are allowing visitors from the UK, so check before you make any travel plans.

When returning to England from a green list country, you will not be required to quarantine. However, you will still have to take a pre-flight Covid test and another test on or before day two after you arrive.

Travel for leisure to amber and red list countries will not be allowed.

All of the latest information and updates on the green, amber and red lists can be found on the gov.uk website.

Why are international holiday costs set to rise this summer?

Glenn Fogel, chief executive of Booking.com, told the BBC that holiday costs are likely to go up due to pent-up demand and fewer planes in service.

After spending months confined to their homes, many people are eager to travel. At the same time, many airlines are having to cut back on the number of flights they operate due to travel restrictions. With such uncertainty still clouding the travel sector, many airlines remain apprehensive about bringing back more planes into service.

All of this means that the current capacity of airlines may not be sufficient to meet the pent-up demand set to be unleashed once international travel is permitted. This is something that airline algorithms are likely to pick up on and prices will be adjusted upwards accordingly.

Prices to some of the countries on the green list have already started going up. The BBC reports that British Airways is now charging £530 for a flight from Heathrow to the Algarve on 17 May, compared to £276 two days earlier.

A Ryanair flight from Stansted to Lisbon will set you back £262 on 19 May. This is more than double the price of £128 for the same flight on 14 May.

Still, some airlines insist that they won’t be pushing prices up any time soon. Tui’s managing director for the UK and Ireland, Andrew Flintham, told the BBC: “Our prices are very, very stable. They’re pretty much like for like, flat, year over year. There isn’t a big increase in there”.

He added: “It’ll be a long time before the idea of trying to increase prices to make more money”.

How can you save on costs when holidaying abroad?

With the cost of holidays set to increase this summer, here are a few things you can do to keep things affordable.

1. Check prices both directly and using booking sites 

Contrary to popular belief, booking websites do not always offer the best deals on flights or hotel rooms. You may be able to negotiate a better rate by directly contacting the airline or hotel. Check with both to get the best possible rates.

2. Be flexible

If you are flexible on travel dates as well as where you stay, then you can make use of the dates that airlines are offering the cheapest flights and where and when it is cheapest to stay.

3. Take out a travel credit card

Unlike normal credit cards, travel credit cards don’t charge you extra for non-sterling transactions and cash withdrawals. Having such a card when on holiday could help you stretch your budget a little further.

4. Pack properly

Make sure you’ve packed everything you need for your trip to avoid having to dig into your spending money later to buy something you could have brought from home.

5. Go for a local holiday

Rather than booking an international holiday, which is full of unknowns, why not book more locally? After all, there are still plenty of wonderful places in the UK worth exploring. More importantly, vacationing locally is safer and will cost you a fraction of what an international holiday would.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »