British tourists are choosing cheaper destinations in southern Europe and hunting for package deals to make their summer getaway more affordable in the face of high inflation and rising mortgage rates at home.
This summer’s holiday season, which will begin in earnest when most schools in England and Wales break up next week, is set to be the busiest for outbound travel since before the pandemic, but European destinations will not benefit evenly from demand from British holidaymakers.
More than 8,600 flights to Greece and Turkey are scheduled to leave from UK airports in August, more than one-third higher than the 6,300 flights in 2019, according to aviation data provider Cirium.
In contrast, flight numbers to more premium destinations, such as France, Italy and Spain, still lag 2019 levels. In total, more than 185,000 flights are scheduled to depart from UK airports in July and August, about 90 per cent of pre-Covid levels.
Turkey and Portugal have so far this year ranked among the destinations with the biggest rise in demand from outbound British tourists, compared with 2019, outpacing the recovery in other destinations, such as France, Spain and Italy, according to arrival data up until May collated by the European Travel Commission.
Montenegro benefited from the biggest percentage jump in visitor numbers, but only about 50,000 Britons travelled to the country last year. A significant reason behind the high demand for Turkey was the strength of sterling against the lira, the tourism group noted.
Tom Jenkins, chief executive of the European Tourism Association, a trade body, said prices for “honeypot destinations” such as Paris, Rome and Venice had “gone through the roof as demand has surged and capacity has been constrained”. As a result, he said, Britons were “increasingly looking elsewhere” to help with budgeting.
From January until near the end of May, visits by British holidaymakers to Montenegro were more than double the number of stays recorded over the same period in 2019, while trips to Turkey were up 59 per cent on pre-pandemic levels, according to the ETC. Visits to Portugal were up 14 per cent.
A surge in bookings earlier this year began to slow in early June “as focus grew on where mortgage rates could be headed”, said Richard Sofer, commercial and business development director at the UK and Ireland division of Tui, Europe’s biggest tour operator.
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But Sofer argued that people were “protecting” their summer holiday budget ahead of other leisure expenditure, because “they want to treat themselves”. He added that the barrage of delays and cancellations that hit the start of the holiday season last year would be avoided this year, despite 950 ground staff at Gatwick airport going on strike for eight days in July and August in a dispute over pay.
Nevertheless, he said customers were taking steps to cut costs, including by booking all-inclusive deals, instead of partly catered or self-catered, in order to “know the absolute cost of their holiday”, and were “shaving a few days off” a break instead of trading down.
Jet2, Britain’s biggest package holiday provider, said last week in a trading update that it had benefited from an uptick in demand for package deals as holidaymakers looked for budgeting certainty amid rising living costs. This summer, customers who bought packages rather than flights alone accounted for 73 per cent of Jet2’s passengers, up 5 percentage points on last year.
However, Paul Charles, a travel industry consultant, warned that soaring prices meant bargains were hard to find. “The escalating costs for holidays at all price levels are the real sticking point for those yet to book.”
In June, the average amount spent per booking by customers flying from the UK to the US was up 23.5 per cent on the same month in 2019, while last year it was just 9.4 per cent up on 2019 levels, according to data from Dohop, a flight connections bookings platform used by more than 60 carriers including Spirit, Avianca and Air France.
Average daily rates in hotels across Europe are forecast to be $262 (£200) per night in July and August, up from an average of just over $200 per night over the same period in 2019, according to travel technology group Amadeus.
ETC chief executive Eduardo Santander said everyone was “choosing a vacation with their pockets in mind this summer but none more so than the British traveller”, noting that stubbornly high inflation in the UK, relative to the rest of Europe, and the after-effects of Brexit had not helped.
“We are talking about a record summer for European tourism spending, but the part the British are playing is maybe a bit smaller,” added Santander.
Source: Economy - ft.com
