AS SCHOOLS break up for summer across Britain, leading tour operators have far more short-haul holidays to sell than usual at the start of the peak season, including tens of thousands of packages at massively discounted prices.
The crisis in the travel industry was revealed last week by the third profit warning in a year from Thomas Cook, one of the ’big two’ tour operators.
Its share price crashed as chief executive Manny Fontenla-Novoa admitted: “We are facing a couple of headwinds unique to us.”
One of those is the collapse in demand for holidays in the Middle East and North Africa - notably Tunisia, Morocco and Egypt - in the wake of the Arab Spring.
The other is Thomas Cook’s failure to hedge against rising oil prices, which has seen the cost to operators of short-haul flights to Europe soar by 40% since July 2010.
But Noel Josephides, who runs Sunvil Holidays, specialising in Greece, fears problems across the travel industry actually go far deeper.
“This summer, many British families are so fearful of high living costs in the eurozone that they have simply not booked,” he says.
“We see it in our company, where children are not a big sector anyway. But the impact of this change on the big operators in peak season is massive because they always rely heavily on family bookings.”
At Inghams, another leading travel group, chief executive Andy Perrin says: “Speculation in the travel industry is that the British travel market is being hit harder than most because of the squeeze on incomes caused by rising prices, low rates of interest hitting savers, and a sharp reduction in willingness to spend.”
The cost of holidays in France is plunging too, following P&O Ferries’ decision to cut the price of some long-haul Dover to Calais returns for car and passengers to just £60 return, for travel until September 1 if booked by July 24.
A decade ago, the fare for the same journey at this time of year cost around £300.
With bookings for Greece badly hit by television pictures of Athens riots, Josephides says the best holiday bargains in Greece will be on two-week breaks in late August, when passengers are desperate to return to get their children back for the new term.
“Every tour operator is stuck with two-week holidays around that time when many people have to come back, so prices are bound to be weak,” he says.
“But really there is spare capacity just about everywhere in the next few weeks - in Spain, Greece, Portugal and Turkey.
“The simple fact is that tour operators and so many firms in travel are simply digging their own graves because there is so much spare capacity still left to fill.”