Will relaxed Covid rules push up holiday prices?

After two tough years in the travel industry, things are finally starting to turn out.

“Starting in mid-January, the trajectory has gone up significantly,” said Paul Hackett, Irish Travel Agents Association president and CEO, Click & Go. “We’ve had three record days in a row this week. Tuesday was the best day we’ve had in two years, which was beaten on Wednesday, and beat out on Thursday.

« It’s still not normal – it’s probably at about 50% of what is normal – but the trend is what we’re looking at, the confidence and the volume of bookings. »

Of the travel agents he spoke to as part of his role at the ITAA, Mr. Hackett says the same pattern is mirroring across the country.

The abolition of testing requirements for vaccinated travelers earlier this month gave the country’s travel agents the first batch, and with positive votes about the Covid situation starting to emerge from political and health circles, more people are beginning to make some temporary vacation plans.

« In the past few days with speculation increasing, we’ve seen inquiries coming in, » said Claire Dunn, managing director of Travel Broker. It’s not ‘booking busy’ yet, we say, but it was ‘inquiry busy’.

Now that the picture about easing restrictions is clear, those inquiries are expected to start turning into actual bookings.

the The World Travel and Tourism Council, which represents travel and tourism companies around the world, expects a strong recovery in the sector this year.

She said summer bookings were already 80% higher than in 2021, while Easter bookings were up 250%.

But what does that mean for the cost of the vacation?

Bargains still remain

Even with the increased demand, it appears that there are still good deals available.

Part of that is because airlines, hotels, and resorts have not yet adjusted their rates to reflect the sudden rise in interest.

“Consumers who booked in January got the coolest deals,” said Hackett. « The industry has a six-week gap, from the beginning of December to mid-January, when everything fell off a cliff. »

He said that Aer Lingus and Ryanair had sales going on during this time – while travel agents were also lowering fares – but it was only in recent days that demand for these offers materialized.

« So, from a pricing standpoint, the value is still there now. »

However, he said it is only a matter of time before market players adjust their offerings.

« These prices will go up once Ryanair and Aer Lingus see a significant increase in volume, » he said. « The closer people get to when they leave, the more expensive it will be – but that’s always the case. »

However, even with the relaxation of restrictions, the holiday season of 2022 is also a very different season from what would be considered normal.

“Anything people have booked since the lifting of restrictions in July and August 2021 has been very close to leaving,” he said. « No advance booking – so what we didn’t have for 2022 is the normal level of advance booking months ago. It was all ‘book now, fly next month’. »

All of this means that there are still deals to be made for people who are willing and able to move fast enough.

However, as the weeks go by – and people get closer to their desired travel dates – expect prices to rise rapidly.

This is especially true when it comes to the high season between June and August.

“There are deals but if you are looking for peak times, and if everyone is looking for the same thing, it will be expensive,” Ms Dunn said. « If you’re willing to go off-peak, and if you don’t want to go to the same place everyone else is going, you’ll get a deal. »

air supply

Another factor that will put upward pressure on prices is the lower amount of availability compared to the pre-Covid years.

Earlier this week, Ryanair announced its largest-ever flight schedule from Dublin Airport, which will see more planes flying to more destinations than it did in 2019.

However, Ryanair will remain below pre-Covid levels at other airports, while other airlines are also likely to stick to a smaller schedule in the coming months.

This led Ryanair President Eddie Wilson to it Expect airline ticket prices across Europe to be on an upward trajectory in the coming months.

Add to that the fact that many will be booking their first proper vacation in three summers — having put their vacation money into gear since 2020 — and budget-conscious consumers may also find themselves competing with more affluent vacationers than usual.

« Money is not the problem at the moment – not to say people waste money, they are not – but it is not the main issue, » Ms Dunn said. « We’ve certainly had people going to a room or balcony with a sea view, where they might as well have gone as before to an interior cabin or a regular room.

« People feel like they’ve had a hard time, and let’s have a vacation – we deserve it! »

But the good news is that there doesn’t seem to be much capacity limitation once people have bypassed whatever bottleneck that may exist in aviation.

« The choice is completely back to pre-pandemic levels in terms of resorts and destinations, » Hackett said. “Everything reopened – Europe started traveling from 1st July last year, so in real terms everything had enough volume. [since then]. « 

Inflation again

As people know very well, the cost of almost everything is rising – in the case of fuel, such a rise was astounding. And if airlines have to pay more for fuel, this cost inevitably passes on to consumers.

The rise in consumer prices is not limited to Ireland either, with the rest of the European Union, the United Kingdom and the United States also experiencing a spike in inflation.

in countries that use the euro; The cost of food, alcohol and tobacco rose 3.2% last year – while the cost of services rose 2.4%.

This ultimately ends up on the consumer plate, and means that holiday makers will likely encounter higher prices even when they reach their final destination.