Budgets Won’t Put People Off Going on Holiday: To book a holiday or not to book a holiday? That’s one of many big questions people are grappling with as they try to make sense of how an increasingly chaotic economic situation will affect their personal finances.
There’s little argument that things are looking pretty grim for household budgets right now. Soaring energy costs, high inflation, rising interest rates pushing up the cost of your mortgage – there’s little comfort to be found in any of it.
At an individual level, the stark reality is that people are going to have to make sacrifices and cut back on spending. And there will be no shortage of pain felt by many.
Surely in the circumstances, we find ourselves in, spending on high-cost luxuries like holidays has to be first in line for the chop? Well, not according to research from ABTA, the UK travel industry association. In its latest annual Holiday Habits report, which includes a poll of people’s travel intentions for the year ahead, the organization found that just 4% of people are ruling out booking a holiday in 2023.
Around a third (35%) did say, however, that they would actively look for cheaper options. Which you could argue is a surprisingly low figure, given the financial squeeze we’re all facing this winter. And holidaying abroad remains the choice of preference of the majority (61%), again perhaps flying in the face of widespread predictions that the cost of flying is due to rise (albeit from a base of historically low airfares).
So what options are holidaymakers looking at to save money on trips next year? One trend travel industry insiders say they are noticing is an increase in people booking all-inclusive holidays. This is put down to people boxing cleverly with regard to the weak pound, which has slipped to historic lows against both the dollar and the Euro in recent weeks.
A weak domestic currency pushes up the cost of spending abroad, as poor exchange rates mean you get less for your money. For example, the days of finding food and drink across Europe close to half what Brits were used to paying at home are a distant memory. With exchange rates close to €1 to the pound, suddenly everything seems expensive on the continent.
With an all-inclusive holiday, you avoid those extra costs. Instead of eating out every night, buying drinks, treating the kids to ice cream, etc, you have everything paid for upfront. That locks in the price and you don’t face any nasty surprises should the pound plummet even further in value. You know exactly what your holiday will cost before you go.
As well as an uptick in all-inclusive bookings, industry experts say they are noticing higher package holiday sales in general. This is interesting because it’s widely acknowledged that, bar sniffing out the very best package deals available, it’s generally cheaper to book flights and accommodation directly online than it is to go for a package through a travel agent.
The motive here seems to be holidaymakers wanting to cover their backs. Post-pandemic travel has been dogged by high-profile disruption since restrictions were lifted earlier this year, with staff shortages at airports and airlines triggering tens of thousands of flight cancellations. Package holidays provide better consumer protection in the event of a cancellation by the supplier. While you might get your money back for a canceled flight if you book independently, it’s more hit-and-miss whether you get money back for things like accommodation or car hire.
The fact that holidaymakers might be prepared to pay more for the added protection offered by a package holiday despite the current cost of living squeeze is interesting. It shows that people are still prepared to spend, but are conscious of avoiding risks with their money.
This is reflected in changing attitudes to holiday insurance. In the past, many holidaymakers have taken a notoriously blase attitude to travel cover, with a previous ABTA survey finding that some 21% of Brits admitted to going abroad without insurance.
But things are very different post-COVID. In its latest poll, ABTA found 71% of people saying they will prioritize a good travel insurance policy before going away. Not only that, but two-thirds (63%) said they will pay more attention to the terms and conditions of their policies so they know exactly what they are covered for.
That’s a big step forward, and one that makes perfect sense in the current economic climate. Whether it’s cancellations, covering medical expenses if you fall ill, or paying out for lost luggage, insurance represents the soundest way to protect your investment in a holiday and cover any potential losses.
So while it’s an extra up-front expenditure, if you’re concerned with avoiding financial risk when booking a holiday, travel insurance is a must. Budgets Won’t Put People Off Going on Holiday.
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Budgets Won’t Put People Off Going on Holiday