Holiday Cost Warning Amid All-Inclusive Rush

The vote to leave the EU has resulted in UK consumers adjusting their summer holiday plans, with 3% even opting to cancel and operators reporting a rush for all-inclusive breaks.

That is according to travel deals publisher Travelzoo (NasdaqGS: TZOO - news) , which is warning of higher costs ahead in the price of holidays.

It carried out a survey on holiday attitudes in the week after the shock Brexit result.

At that time, the pound had sunk in value against the euro and was at its weakest against the dollar since 1985 - down by 11% - following a rush for holiday money as people looked to make their cash go as far as possible abroad.

Sterling hit fresh 31-year lows early against the US currency on Wednesday.

Travelzoo said the pound's plunge was the core reason for 3% cancelling trips - a number it described as "minimal" - though 9% of all respondents admitted concerns about being treated negatively abroad in light of the divisive EU vote.

Tour operators, including Thomas Cook (Xetra: A0MR3W - news) , told Sky News they were seeing no real evidence of cancellations - with such a move often risking the loss of money and, in many cases, the complete cost of the holiday.

A spokesperson for Thomson and First Choice said: “We have not seen any signs of consumers putting off booking their holidays and our summer and winter holiday programmes continue to sell well.

"People still want to get away from it all and spend time with their families as normal, to recharge their batteries and get some sun and adventure.

"And as more than half of our holidays sold in the UK are all-inclusive, these customers don’t have to worry about currency impact on in-resort spend."

France, Spain and Portugal are proving particularly popular this year - with operators buying more beach break capacity in such countries following a collapse in demand for holidays in Turkey and Egypt on security grounds.

Travel firms agreed interest in all-inclusive breaks had spiked for destinations worldwide - not just in Europe.

Travelzoo said 26% of the people it questioned were now actively considering one, with the US remaining popular despite the currency issue.

It highlighted concerns in the industry for the future - with the risk that foreign destination contracts for next year will cost operators more to buy - with those additional costs being passed on to UK consumers in the form of higher prices.

Holiday firms have the power to raise surcharges on breaks by up to 10% to cover higher costs but it is understood few have imposed such a move yet or intend to in the short term.

UK managing director of Travelzoo, Joel Brandon-Bravo, urged the Government to act now in support of the holiday industry and consumers amid the uncertainty ahead.

He said: "If they react slowly, and tourism is pushed down the list of priorities, British holidaymakers could be facing more expensive overseas holidays, and consequently we could see a dip in travel."

He added: "The fall in the pound will take time to filter through into higher costs for flights and cruises but a sustained lower pound will eventually cause a price hike."

The industry body, ABTA, said: "While consumer confidence more generally may be knocked by the political uncertainty following the (EU) vote, most holidaymakers will have made their summer plans already, and the latest industry figures show that the market is up 5% year on year."

It reminded travellers there would be no change in their rights and travel rules until such time as the UK officially leaves the EU.