Summer holidays are ripping us off
Most of us know that going on holiday during the summer months will probably cost us a pretty penny. But, do you realise just how much lighter your pockets will be?
I don’t have children, but my partner works in a school and can’t take holidays in term time. It’s a constant source of frustration because we regularly have to pay higher prices for our holidays.
Luckily, we can make savings because the school’s private and term dates can differ from state schools. But, if this wasn’t the case I would be very tempted to encourage him to bunk off so we could get better holiday deals.
And is it any wonder when you’re dealing with whopping price hikes? Our research found that those planning to take a holiday in August could pay more than double the amount of those taking exactly the same holiday in September.
Up to an 181% price increase
We found a Virgin Holidays break to Jamaica increased by 181% in August compared to September. A family of four staying at the Sunset Beach Resort in Montego Bay, departing on 21 August this summer, would pay £7,343. However, the same holiday departing on 4 September, would cost £2,611 – a whopping £4,732 less.
A Thomas Cook holiday to Mallorca would have cost 78% more in August compared with the same holiday in early September – £1,719 compared with £996.
You don’t know how lucky you are if you don’t have to travel during school holidays. A Which? Holiday survey found more than three in ten UK adults who took a holiday in the last 12 months did so during July and August. And six in ten said their last holiday was during school holidays.
When does profit become profiteering?
The tour operators told us that prices reflect supply and demand with family-friendly destinations being more popular at peak times. But, I can’t see how tour operators can justify such huge price increases.
It feels like profiteering, penalising those people who can only travel at this time. So it doesn’t surprise me when parents take their children out of school during term time to go on holiday.
Having seen first-hand the extent of the price differences between August and September, I can’t honestly say that I wouldn’t do the same if I had children myself.
Would you take your child out of school during term time to avoid paying peak-time holiday prices?
Yes – definitely (33%, 38 Votes)
No - never (30%, 34 Votes)
Only if it was a couple of days at the beginning or end of term (26%, 30 Votes)
It would depend on how much I would save (11%, 12 Votes)
Total Voters: 114
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pickle
I can understand firms wanting to make more money during school holidays – but I think the increase in price is excessive. ‘spose it is a form of rationing as well,. Families with children have no choice of when to go on holiday – to hit the pacage holiday rip-off families should collaborate and all stay at home, or holiday in this country, for one year – that would bring prices tumbling!
robodoc
I did take the children out of school occasionally when they were very young, but they soon reach an age when they themselves worry they would be missing something. Now coming to the end of over 20 years of paying the school holiday surcharge, I am able to gloat a little, but had always tried to see it as not profiteering by the companies but more as a need to subsidise holidays at the other times which would otherwise have simply been unviable. When we stay in our hotels and villas, dine in pretty restaurants and take boat trips, it would perhaps do to remember how few of the facilities would be available if no-one holidayed outside the end of July and August.
Methuser-la
Re: Summer Holidays
Why not think of it as hefty discounts if you go outside school holidays – not heavy penalties the other way round? Most decent items of clothing in ‘Sales’ are the very small or very big, for the obvious reason that the shops would be stuck with those at normal prices. If you are very small or very big – great, you can take advantage of the offers. If you aren’t at the extremes -tough! Similar reaoning with holiday dates.
Practically – there is no real reason why UK has the same school holidays in every county. Why not stagger them? Holiday companies would have to reflect this broadening of the holiday season in their prices.
It is only a question of ‘parent power’ forcing the changes through local government.
Kiersten
At the moment, I’m fairly satisfied that the kids should just come out of school when we can afford a holiday…. and that won’t be during the school holidays, there is just no way I could afford those prices. As a single parent, I am unlikely to be able to afford those prices when the kids get older and can’t afford to miss school, so I guess they’ll just have to miss out on holidays instead.
richard
Think of it – teachers get ripped off – every single year – with or without children – for their entire working lives – and you are dissatisfied!
prep
I have a 4 year old son who has just started school. To go to BUTLINs is a 300% hike in price. In term is £189 – school holiday price £649!!!!!! how do they justify this – by ‘supply and demand’ – they cannot reasonabley justify this. Its appalling.
Paul
Amanda. Surely you do not believe this. You are paid to know how the travel industry works and the allegation of profiteering and rip off is fueling a popularist myth.
You can liken the holiday industry to an imaginary world in which everybody eats PIZZA on a monday night. The rest of the week almost nobody is interested in pizza. So pizza resturants and take aways are worked to capacity on a monday night and each table could be filled twice over. People are so keen to eat pizza on a monday that they will pay over the odds for a table, and surprise, surprise, they do just this. There are loads of pizza businesses and they keep on springing up. They are all packed on a monday. The rest of the week the pizza prices are rock bottom and there are bogof offers all over town, but even so the resturants are mostly empty. So basically the investment needed to buy and run a pizza business has to be mostly met from your takings on a monday – the rest of the week you lose money. Now mondays LOOKS like a rip off, but it isn’t!! You are SIMPLY supplying what people DEMAND. Pizza on mondays.
Now I agree that the holiday business LOOKS like a rip off, but it isn’t, and ‘Which’ magizine should really be able to see this. I am a long time fan of ‘Which’ and in this case you’ve got it wrong. People need to be educated; the industry does not need to be demonised. The demand for summer holidays is so huge the industry will always become twisted to reflect this.
If you look at the profits of the holiday companies you will realise that no one is being ripped off. It really is simply SUPPLY and DEMAND. Most of the year holidays are sold at or below cost. In the winter all the package companies make a substantial loss. In the shoulder summer months, outside of the summer holidays, the companies are making small amounts of money and in the peak periods they do make substantial markups, but most of this simply covers the losses made over the rest of the year. A good margin on turnover in most businesses is considered to be 5%. The holiday industry struggles to make 3%. Please Amanda could you explain where the rip off is? If it was a rip off industry then you would not see droves of holiday companies going out of business every time the economy catches a chill. The only way to lower summer costs would be to find more holiday capacity in the summer. That means more hotels, more coaches, more airports, more villas, more aircraft, just for 2 months in the summer. What to do with them for the rest of the year and how to pay for them???
I agree that the difference in cost between high summer and other periods is galling – I have a family of 5 and we generally avoid the high season at all costs. However there does not seem to be another model that will enable the holiday companies to stay in business. If they try to cover their costs by putting up prices in the low and mid season, no one will buy those holidays and out of business they go!
This is not like banking, or insurance where there does seem to be genuine money printing going on. If it was the likes of Thomas Cook would not be tetering on the brink of bankruptcy.
I look forward to a considered reply with an explanation of an alternative business model for the holiday industry. To whip up a campaign against holiday companies when there is minimal profit will do no good at all, and will not be in the interests of the consumer. This smells rather like a witch hunt, rather than a ‘Which’ campaign.
Paul
Actually, what methuser states about staggered summer holidays would be the only way to reduce the peak demand and this would lead to reducing prices, like eating PIZZA on tuesdays and wednesdays as well!! This is where ‘Which’ should start a campaign. I am sure the holiday companies would be delighted at a spreading of the demand and the family customer would see a significant reduction in price. However, be careful what you wish for as the super cheap out of season offers could vanish!!
Amanda Diamond
Hi Paul,
Thanks for your comprehensive comment. I like your pizza restaurant analogy!
To clarify my view – and this is my view and not the view of Which? – I wasn’t suggesting that the holiday industry is a rip-off. My rhetorical statement was merely pondering the justification between the huge increases (181% in one instance) between holidaying in August compared to September. Of course I’m not so naïve as to have a lack of understanding of the rudiments of the concept of supply and demand. High demand means that holidays during peak times will be subject to some price inflation. But does the price increase need to be so sharp? And does this massive price increase need to happen at EVERY school holiday during the year?
Why, for instance, is it so much more expensive during the February half term than a week earlier or a week later? Supply and demand, you will say. But can such massive premiums be justified? I don’t think so. School holidays are not the only time of year that people go on holiday so I think costs could be spread more evenly. Price is not the only reason people go on holiday outside of typical peak times – a resort being less busy and weather are also significant factors.
Last year some research by Santander found that it was 53% more expensive to go on holiday abroad during the February half term week than other weeks in February. February is hardly traditional holiday season so this would seem to me to be opportunistic – to catch families (and those who work in education) should they decide to go away during half term. I don’t think such huge premiums can be justified. But this is just my opinion
Having just taken a cursory glance at the end of year profits in 2011 for TUI, I would suggest that a net annual profit of £87million is pretty healthy! But then I’m not an economist – simply a working journalist – so that would sound like a healthy from my point of view
Another thing to note is that travel companies hedge their costs quite far in advance. When they get a good deal for services that make up their holidays, they’re not quick to pass these savings on. For instance, they hedge currency conversion rates ahead of time. When the exchange rates go up, this increase is passed onto customers in the form of holiday surcharges, but when these rates go down, customers are not then refunded the difference.
Again I’m not saying that the holiday industry is a rip-off – that would be a scandal! But it does seem to me, that such extortionate price hikes specifically during school holidays whiffs of holding people to ransom. I accept that you may not agree, but that’s the beauty of healthy debate – we can agree to disagree
Rex
If Paul’s argument about prices evening out across the year is true, then this translates to people who are forced to take holidays during school term breaks being made to subsidise costs for everyone else in the other months. I do agree with Anna that there is a large amount of profiteering going on here.
The pizza analogy is very good.. I tend to liken it more to a herd of Wildebeast crossing a river every year at the same time and the crocodiles are waiting to bite chunks out of them. You could of course argue that people don’t actually have to take holidays. My family never did, not even once. And as an adult I’ve only had a handful of short day trips or weekends somewhere not too far from where I lived, with just one exception which I considered to be a proper holiday, thought it still wasn’t overseas. You can survive without these things.. but life is much richer with them.
I do think time with family is important, especially for children, considering they spend more time each day with teaching staff, such as I used to be, than they do with their own parents. And education staff easily get burnt out too. It’s a high pressure job, even at primary school level, contrary to popular belief that it’s just mucking around and playing, and teachers often spend part of their holidays catching up on marking, writing student report cards and assessments, and doing planning for the next term, which is an incredible workload. I was only a teaching assistant, so I was spared most of that but frankly, they are not paid enough for the amount that’s expected of them. A break away is just what is needed to recharge the batteries and then they get slashed by holiday prices when many are already underpaid.
I think the only solution is to break up the traditional way we work and teach… a Mon-Fri, 9-5 system actually creates massive social problems, the cost of which is rather inestimable and this is just one of them. We need extra capacities on our trains and at stations for example, for the sake of a 2 hour window in the morning and evening, when capacity could easily be spread across a wider timeframe.. and commuters are similarly stung with peak travel fares. They say it’s to help regulate the system, encouraging people to travel at non-peak times unless they really have to, but most peak travellers have no choice but to travel at that time. In that case it absolutely is profiteering and this business with the holidays is no different.