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Package holiday prices to rise 9% for summer 2018

The cost of package holidays could rise by as much as nine per cent next year, an analysis of two of the UK’s biggest operators claims to show.

Travel companies are already marking up prices for summer 2018 as major currency contracts which have protected them and their customers from the worst rises begin to expire, according to research stockbroker Bernstein prepared for investors.

Operators use hedging contracts to protect them for as much as 18 months after currency shocks.

But once the contracts expire, prices rise in line with currency inflation unless they can cut costs in other ways such as using cheaper hotels.

The protection is likely to unwind altogether on holidays booked for this winter and next summer.

Bernstein leisure analyst Richard Clarke, whose firm has collect information from Tui and Thomas Cook websites, said operators have already started to increase prices.

This has led to an average rise of eight per cent this summer but worse pain for holidaymakers was to come. He told the Mail on Sunday: “Everyone has been focused on this summer, thinking that is where the big impact will be.

“But at the moment operators are looking OK and bookings are flat. But consumers will definitely have to pay more this time next year.”

Tui and Thomas Cook declined to say how much prices would rise.

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