Why will 2023 summer holidays be so expensive and how can we get a good deal?

ITV News' Ian Woods looks at the new figures showing significantly higher prices for trips to some of the most popular holiday destinations

New research has revealed the price of flights and holidays has increased by hundreds of pounds.

Official figures show the cost of buying plane tickets has risen by a record margin just as thousands will be looking ahead to summer holiday plans.

So, what's behind the spike in prices and what can you do to get a better deal?

How much are prices rising?

According to the Office for National Statistics, air travel increased by 44.1% in the year to December 2022 - a record rise.

Consumer rights group Which? reports prices this Easter are up 51% on average, compared to the same period in 2022.

Using data from airfares analyst Skytra, Which? analysed prices for direct flights to 15 popular destinations in Spain, France, Italy, Greece and the US from six of the UK’s busiest airports.

It found Italy and Greece have seen the most significant rises, with airfares up 71% in both cases.

While tickets to Italy were available for £84 on average in 2022, this year that figure is up to £150.

The US, which has the highest average fares at £1,527 per seat, saw the smallest price increase, at 31%.

“Travellers are likely to experience significantly higher prices than they’re used to for a trip away this year,” Rory Boland, editor of Which? Travel, said.

“Flights in particular have seen some of the steepest price rises so far, with our research finding flights to popular destinations including Greece and Italy up 71% compared to last year.”

Does this mean fewer people are going on holiday?

Despite massively increased costs to popular travel destinations, the evidence so far suggests bookings are holding up.

Independent aviation consultant John Strickland expects this trend to continue.

He told ITV News: “It’s early days, but bookings are still pretty strong. Despite everything, people still want to book.”

That view is shared by Ryanair boss Michael O'Leary, who attributed the strong booking performance - which comes despite a cost-of-living crisis - to people deciding to “scrimp and save” elsewhere to “protect their holiday.”

“One of the things that has emerged out of Covid is the annual holiday, or the second holiday, or the week in the sun, is no longer being considered by many to be a luxury that we can drop,” he said.

Why are tickets more expensive?

This high demand is one factor driving the rising costs, with passengers willing to pay higher prices and many airlines still not back to running their pre-pandemic number of flights.

Mr Boland said huge demand for holidays have combined with inflationary pressure to create a “perfect storm of spiralling costs.”

When restrictions eased after Covid forced airlines to keep planes grounded for more than a year, demand for tickets shot back up more quickly than expected last summer, Mr Strickland said.

“It came back so quickly, and airline businesses are not the sort that you can shut one day and then reopen the next as if it’s business as usual,” he said, adding that many airlines are still not back to full capacity.

“There are a lot of specialist pilots, for example, that need to be retrained, you’ll find people who left the industry and didn’t come back.

“For technical reasons, it is difficult to get back to previous levels.”

Even staffing has to be addressed, with several airlines cutting jobs to save costs during Covid, Mr Strickland added – but with demand soaring, more staff are needed sooner than expected.

In some cases, they’re coming back having negotiated better working conditions, meaning staffing costs have gone up.

“Again, you have to pass those costs on,” Mr Strickland said.

But perhaps the biggest driver of ticket prices has been the cost of fuel – which Mr Strickland said typically accounts for one third of airline expenses.

“Over last year and a bit we’ve seen a real rise in fuel prices, we haven’t had prices this high for airlines since 2008,” he said.

“Oil producers would rather supply energy for cars and for homes, aviation is an afterthought. So, when fuel prices go up, they go up even more for aviation.”

He added that some airlines, like Ryanair, have navigated rising fuel costs relatively successfully by hedging their prices with suppliers – agreeing a fixed cap in the same way households could agree on an energy tariff.

This is not necessarily done to pay the cheapest prices, but for certainty. Knowing what their fuel costs will be ensures they can plan more competitive ticket prices regardless of the rise and fall of energy prices.

Nonetheless, fuel prices are a crippling factor across the board, with Ryanair boss Mr O’Leary predicting fares as low as £9.99 will not return “for the next year or two” due to high oil prices.

Could strikes complicate things?

To add to potential travel misery, Mr O'Leary says planned strikes by air traffic controllers in France over pension reforms risk "shutting everybody down" if it drags on into summer.

Eurocontrol, which manages air traffic across Europe, has anticipated "major" delays this summer, in a repeat of the disruption experienced last year.

It anticipates getting closer to pre-pandemic traffic levels "will not be easy" and believes "ramping back up close to 90% of 2019 traffic over the summer caused immense difficulties."

And, due to many air routes from the UK going through France, British holiday makers are likely to get caught up in the industrial action even if they're not going to the country directly.

“The real pressure will be on Germany because of the situation in Ukraine,” Mr O'Leary said.

“Most of southern Poland has been closed off for NATO exercises, so everything going north-south from the Baltic states down to Greece and Italy now has to fly around Germany.

“All the long-haul stuff going to Asia now has to fly down around Germany and across Romania, out over Iran, because they can’t fly over Russia.

“So there is real pressure on Germany, northern Italy, those kinds of corridors there and that’s going to be a challenge.”

Can I do anything to save money?

The key message from analysts is to book early.

“If you need to book a certain destination or dates, such as during the school summer holidays, book as early as possible to ensure the best price,” Which? Travel editor Mr Boland said.

Mr Strickland said airlines put their cheapest fares on sale early, with a limited number of seats available before the price rises as planes begin to fill up.

Some other tips include:

• Considering less popular destinations where the demand is relatively low.

• Avoiding holidays in July or August, where possible. The so-called ‘shoulder seasons’ of May to June and September to October generally still have favourable weather conditions, without the summer school holiday price tag.

• Travelling from airports midweek and avoiding weekends, when demand for flights is lower.

• Don’t just rely on comparison sites – check prices directly on the airline’s website too as they often try to offer the best deals.

• Booking an all-inclusive trip gives you the assurance that most of your holiday costs are covered in the up-front price you pay. Data from Travelsupermarket shows Spain and Portugal to be the cheapest destinations for all-inclusive holidays.

• Consider booking directly with the hotel. Even if hotels are only able to match the price you have found online, they may offer an incentive such as a free bottle of wine.

Where are the cheapest places to go?

Despite rising costs, better value destinations for package holidays can still be found.

Of the six popular destinations Which? looked at, Portugal had the smallest rises in price, with the cost of a week’s holiday rising by 7% on average, to £705.

Spain still offered the cheapest getaways, with a week’s package holiday costing £693 per person.

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