Tatton Teaser

Posted 9 September 2024

The latest Eurostat publication suggests that package holiday prices in Europe, have increased year on year in July by 6.6%. Prices have been trending upwards since late 2021 but this year increases have been slowing, with international travel seeing more modest increases than domestic travel prices in the region.

However, this has not yet impacted major European package holiday providers. TUI has published very strong results, posting record revenues and EBIT growth last quarter. Interestingly, UK peers including low cost airlines such as Jet2 and EasyJet, that have introduced package holidays as part of their offerings, have also seen strong results over the same period. For example, EasyJet’s package holiday arm, launched in 2019, is now accounting for more and more of the group’s earnings, with a 42% rise in revenue on a quarter on quarter basis. Jet2’s equivalent arm has also seen significant growth.

From a consumer perspective, an average UK family spends, in weekly terms, around 4% to 5% of its income on holiday, which has been fairly stable over the past few years (with the exception of the Covid years).

Growing number of passengers for airlines, rising airport traffic and record arrivals for popular destinations such as Greece, Portugal and Spain suggest that consumers keep spending on travel and holidays. However rising tourist taxes in major holiday hubs proposed to curb demand, upcoming tourist visa costs and rising prices for accommodation and airfares could lead to a slowdown in these trends.

Thank you Dimitra Liga for the analysis.