With the cost of living soaring, now might actually be the perfect time to book a holiday


It’s probably a mug’s game to try to make predictions about travel after what has happened over the last two and a half years. But that is what anyone who is planning a trip this autumn or winter, or even looking further ahead into 2023, is faced with doing.

First, of course, you have to work out whether you can afford to travel at all, given the latest economic news and the terrifying rise in energy prices. (Although maybe you think a couple of weeks in southern Spain in November, for example, would save you so much on your home heating bill that it would actually be more of an investment than an indulgence).

Then you have to decide whether it is better to book now or wait and see what impact the recession may have. The problem with making that judgement is that the factors which affect holiday prices and availability are so volatile and their impact is so unpredictable – especially at the moment. Energy prices and inflation could continue to soar. But while that would tend to push up prices, it may sharply reduce demand, which might have the opposite effect.

On the other hand, there might be some long overdue good news in Ukraine which might cause energy costs to plummet. That might produce a surge of confidence which would make tour operators and airlines more bullish about the prices they could charge.

Luckily, I think the calculation is a straightforward one. One of the key advantages of travel is that it is possible to fix much of the cost in advance. If you are clear that you want a holiday and you find one at a price you can afford, you will almost certainly do well to book and lock in that price now. Once you have booked and paid for your flight, an airline is not going to come back and ask for more money, nor is a hotel. True, you may miss out because you book and then find prices fall – but that does seem a fairly unlikely scenario at the moment (except perhaps in very low season, like early December winter sun and ski holidays).

Also true, is that there is a slight risk of price increases when it comes to package holidays even after you have booked. Tour operators have a legal right to charge you extra for your holiday if their costs go up. Not just by putting up selling prices, but by sending you an additional bill – or surcharge – even after you have booked and paid. 

Under UK law, however, there are strict rules about how and when an operator can do this. And those reasons are limited to a drop in the value of the pound, higher taxes and increases in fuel costs. General inflation isn’t a reason which they can give. And if any surcharge is higher than eight per cent 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 per cent of any increases). True, even these rules mean that you could be charged an extra £320 on a £4,000 holiday, but at least you can get your money back if that is too much. 

Finally, if you do book, make sure your money is protected – either through the Atol scheme (caa.co.uk/atol-protection) or travel insurance which includes cover for financial failure.

Important news on credit notes

A key factor for some people in deciding whether or not to book now is the situation with credit notes issued for cancelled holidays during the pandemic. Last week, the CAA said that the value of unspent refund credit notes which were issued under the Atol protection scheme currently totals over £54 million. But it will not be extending that protection. If a travel company goes bust after September 2022, consumers with outstanding refund credit notes will no longer be covered and risk losing out on money they have already paid if the company they booked with goes out of business. To avoid this, you need to use the voucher to make a booking or request a refund.

Are you planning on booking a holiday for later this year or next? Or would you prefer to wait until closer to the time? Let us know, with your reasons why, in the comments below

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