I wrote this article in 2013 for a publication specialising in travel law. I've resurrected it now to illustrate the failure of the mainstream media - of which I was long a part - to run complex stories on financial protection for travellers. A Fleet Street editor once told me he didn't want "anything about insurance" in the travel pages. I doubt if this will ever change. Yet his and other paper have always been quick to attack when thousands of Brits are left out of pocket or stranded in foreign resorts when a tour operator collapses.
Tuesday, 26 July 2016
Saturday, 23 July 2016
No sooner does the £ plummet than the "staycation" myth raises its hoary old head again. It's as predictable as "crashed jet had history of problems" when some hack has got hold of its routine maintenance records. Suddenly, so goes the lazy thinking, thousands of Brits have decided to stay in the UK rather than face the increased costs created by the slide in sterling since the Brexit vote. There will be some effect, admittedly, but it won't be significant. Why? First because the vast majority of Brits planning summer holidays have already booked - and in many cases paid in full - for their breaks. And second because the lack of guaranteed sunshine here means you may lose most of any currency related savings in ticket prices at rain proof attractions. Any serious increase in numbers holidaying in Britain is more likely to be the result of terrorist attacks that have made Tunisia and Sharm el Sheikh near no go areas and devastated Turkey's tourist industry - which has been dealt a further blow by lsat week's attempted coup. This has made accommodation in popular western Mediterranean resorts much harder to come by. As for the longer term impact of Brexit on holiday decisions, much will depend on political developments between now and the main, post Christmas summer booking season (it's increasingly likely that those of us who ski will find our already pricey trips markedly more expensive next season). An economic downturn could spell serious problems in the travel industry, especially for tour operators who gambled that a Remain vote would but the value of sterling. Further high profile collapses would clearly dent public confidence. One the other hand, signs that a deal is in sight with EU leaders that would result in the UK effectively or actually staying in the EU could encourage traders to buy sterling again, pushing its value up. Its weakness has already prompted the big US airline Delta to reduce planned capacity on winter flights from the UK to the US. Better safe than sorry. ON top all this is uncertainty caused by the US Presidential election. Suppose what would have seemed purest fantasy a couple of year back comes to pass, and Donald Trump beats Hillary Clinton to the White House.What would be his policy on the visa waiver programme? Trump has already spoken of a ban on immigration from countries with problems of home grown terrorism. It doesn't seem to me such a big jump from there to the reintroduction of visas for travellers who are currently exempt. It must add that successive Washington administrations have failed dismally to attach sufficient importance to incoming tourism. I fervently hope whichever side takes power next will recognise the importance of maintaining the visa waver programme. One thing's for sure though, not many Brits are likely to replace a hoped for American holiday with a staycation.
Friday, 8 July 2016
It appears not to have dawned yet on many prospective summer holiday travellers that the £ has plummeted in the aftermath of Brexit. Tour operators are reporting that bookings have continued to arrive, particularly for long haul trips. But there seems little doubt that in the slightly longer term, things look bleak for consumers and the industry. As I write sterling is 10% weaker against the euro than it was on the eve of the vote and around 13% down against the US dollar. So a couple of weeks touring for two people in Europe, with spending at, say a relatively modest €300 a day, will cost the best part of £400 extra. Package holidaymakers will be less hard hit, as they will have paid much of the cost upfront. Those who have booked all inclusive trips will escape most lightly. But watch out if you made a pre-Brexit hotel booking on a website allowing you to pay when you check out and showing an illustrative per night price in £s. By the time the credit card fee has been added and the fall of sterling taken into account, the final bill could look very different. It's open to question whether or not there will be surcharges on packages. The amount and timing of surcharges are tightly limited by an EU directive passed not law by the UK Government. (Yes, the same EU British voters elected to leave).Tour operators must absorb extra costs - such as those created by currency fluctuations - up to the first 2% of the holiday price. They can't surcharge later than 30 days before you depart. And the maximum they may charge is 10% of the package price. Much will depend on the extent to which operators bought in advance the currency needed today hotel companies and other suppliers abroad. Industry insiders say it's certain that some were caught out, gambling that a remain vote would prompt a rise in sterling's value against the euro another currencies. As for this who haven't decided where to go yet, the advent of online bookings has at least given operators more flexibility to adjust prices than in the days of the hard copy brochure. The more expensive the accommodation you choose, the more the price is likely to rise. If the hotel element represents, say, 60% of the price of a £700 holiday in Euroland, that price could rise by £56. But even that calculation hangs on whether the operators decides to sacrifice some of its profit margin to keep business flowing. On top of all this is the impact on flying costs. The price of aviation fuel, which is paid for in US dollars, has dropped. So, since 2010,have average worldwide fares. As with tour firms, the short term effect will depend on how much - and at what rate - airlines bought forward. The percentage fuel represents as a proportion of airline operating costs varies, depending on the length of routes (it's higher on short flights) and the efficiency of the aircraft they use. So even working out what impact a 7% appreciation of the US$ against sterling will have on overall fares is mighty difficult and calculating the effects individual routes with any certainty impossible. That said, I wouldn't be surprised to see fares from the UK rising by 2%-3%. All this speculation depends, of course, on speculation - the speculation of currency traders as they bet on the way they think the UK economy will move. All I can say on that front is - buckle your seat belts.