Warning of holiday price increases as firms hit by costs of regulation

Warning of holiday price increases as firms hit by costs of regulation

New package regulations coming into force in July will provide greater protection for consumers but could lead to increased prices, experts warn.

Speaking at a filming day ahead of this year’s Barclays Travel Forum, Nicki Spoor, head of audit and regulation at travel accountancy firm White Hart Associates, said:

“The Civil Aviation Authority has got consumer protection at its heart, but high on consumers’ list of priorities is the cost of holidays.

“So with this raft of regulations coming in, pushing up costs for holiday companies, the question is, is it to the detriment of customers because of higher prices?”

Spoor said firms had already increased prices after regulations banned credit card charges earlier this year and are facing implementing new GDPR data regulations as well as the new Package Travel Directive (PTD).

She added that even if firms could avoid increasing prices, they might not be able to pass on the advantages of cheaper flying on competitive routes or foreign exchange gains to the consumer.

Martin Alcock, director of The Travel Consultancy, agreed that prices are likely to rise as a result of the revised PTD as more travel sellers will have to take out product liability insurance.

He said this would particularly affect the dynamic packaging market that had previously been able to avoid the full liability of selling a package under the old Flight-Plus Atol arrangement.

“If you are a travel business, the problem is your costs are being squeezed but your prices are defined by the market, so there will be winners and losers.

“The bigger companies will be able to absorb this but it will be the smaller companies that will be squeezed and you will get consolidation off the back of that.”

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