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Sterling's weakness 'could push holiday prices up'

13 June 2017 07:22

Tui is the owner of Thomson

Tui is the owner of Thomson

UK holidaymakers could face higher costs in the months ahead following the collapse in the pound, the owner of a major travel firm has warned.

Klaus Mangold, chairman of Thomson owner Tui, said that while efforts have been made to keep costs steady, the weakness of sterling means prices for consumers are likely to increase.

In comments made to the Press Association, he said destination costs are also rising in some parts of the world, including Italy, Spain and Greece.

Mr Mangold commented: "Y ou have to compensate it and I believe that we are making major efforts to do this and to make sure that ... we can offer our customers a reasonable pricing as far as destinations are concerned."

Rising inflation

In light of higher inflation, the expert said Britons already appear to be taking shorter breaks abroad. On average, he said holiday times have been scaled back slightly.

Over the six months to the end of March, Tui managed to achieve a 3.3% rise in revenues, to 6.38 billion euro (£5.4 billion). And the company reported that British bookings are still resilient despite the vote to leave the European Union last June.

Switching destinations

In light of terror incidents in Turkey and North Africa, some travellers have switched to different destinations.

Mr Mangold said: "A company such as ours, which has invested a lot over the last five years in hotels and in aircraft - to put it in a general way in fixed assets - is much better off to shift, as well, our customers potentially from one country to another if needed. And so I believe this is an advantage that we have."

In terms of the recent terror attacks which have hit Britain, he said a long-term downturn in demand for breaks in the UK is not anticipated.

While many consumers are shocked by the events taking place in countries like the UK and Germany, the expert concluded that people still have confidence that they can resolve their issues.

Along with flights and hotels, travel insurance is something people can shop around for before heading on overseas breaks.