It’s quite a mug’s game to try to make predictions about travel after what has happened in the last two and a half years. But that’s what everyone planning a trip this fall or winter, or even looking further into 2023, faces.
First, of course, you need to find out if you can afford to travel at all, given the latest economic news and the frightening increase in energy prices. (Although you might think that a couple of weeks in southern Spain in, say, November would save you so much on your heating bill that it would actually be more of an investment than a pleasure).
Then you have to decide whether it is better to order now or wait and see what consequences the recession may have. The problem with making that judgment is that the factors affecting holiday prices and availability are so volatile and their impact so unpredictable – especially at the moment. Energy prices and inflation may continue to rise. But while that would tend to push up prices, it could sharply reduce demand, which could have the opposite effect.
On the other hand, there may be some long-awaited good news in Ukraine that could lead to lower energy costs. It could provide a wave of confidence that will make tour operators and airlines more optimistic about the prices they can charge.
Fortunately, I think the math is simple. One of the most important advantages of traveling is that it is possible to fix many of the costs in advance. If you’re clear that you want a vacation and you find one at a price you can afford, you’ll almost certainly want to book and lock in that price now. Once you’ve booked and paid for your flight, an airline doesn’t come back and ask for more money, and neither does a hotel. Granted, you could miss out because you book and then find prices drop – but that seems a pretty unlikely scenario at the moment (except maybe in very low season, like early December winter sun and ski holidays).
It is also true that there is a small risk of price increases when it comes to package holidays even after you have booked. Tour operators have the legal right to charge you extra for your holiday if their costs increase. Not just by setting sales prices, but by sending you an additional bill – or surcharge – even after you’ve ordered and paid.
However, under UK law there are strict rules on how and when an operator can do this. And these reasons are limited to a fall in the value of the pound, higher taxes and increases in fuel costs. General inflation is not a reason they can give. And if a supplement is higher than eight percent of the holiday cost, you have the right to cancel for a full refund. (If the company is a member of Abta, it must also absorb the first two percent of any increases). Granted, even these rules mean you could be charged an extra £320 on a £4,000 holiday, but at least you can get your money back if it’s too much.
Finally, if you book, make sure your money is protected – either through the Atol scheme (caa.co.uk/atol-protection) or travel insurance that includes cover for financial failure.
Important news about credit notes
A key factor for some in deciding whether or not to book now is the situation with credit notes issued for canceled holidays during the pandemic. Last week, the CAA said the value of unused refunding credit notes issued under the Atol protection scheme currently stands at over £54m. But it will not extend the protection. If a travel company goes bankrupt after September 2022, consumers with outstanding refund credit notes will no longer be covered and risk losing money they have already paid if the company they booked with goes out of business. To avoid this, you must use the voucher to order or request a refund.