Summer's coming, but might tourists be deterred by higher prices? | Javier Furones


The Bulletin yesterday reported that British tourism to Spain was hitting a record despite Brexit. However, it would appear that Majorca and the Canary Islands are currently not reaching the bar.

Travel giant Thomas Cook, for example, has hiked the price of its summer package holidays by nine per cent and shifted deals towards Greece after facing competition and soaring hotel costs in popular Spanish islands.

The group said hoteliers in the Spanish islands have put up their prices by six to eight per cent after seeing surging demand to destinations such as Majorca and the Canary Islands, as sunseekers switched from Turkey and Egypt following political turmoil and terror attacks. Thomas Cook said it was also seeing intense competition as airlines and holiday firms have ramped up their services to the Spanish islands, but stressed it wanted to focus instead on more profitable "high-end holidays rather than chase volume growth".

It said this had left sales of package holidays for the key summer season "slightly behind last year’s levels, while pricing is up nine per cent".

Total UK summer bookings are one per cent higher, while average selling prices across holidays and flights are up by two pe rcent as the package holiday hikes are offset by falls in seat-only flight deals after airlines slashed prices due to competition and falls in fuel costs.

Chief executive Peter Fankhauser said Thomas Cook remains "cautious about the rest of the year, given the uncertain political and economic outlook". He raised concerns over Brexit, a raft of looming European elections, a stronger dollar and the threat of disruption. But the group cheered its moves to shift demand to Greece, with Fankhauser dubbing it this summer’s "stand-out" destination.

The firm forecasts 2.5 million holidaymakers booking to go to Greece this summer, up 500,000 on a year earlier. This marks a recovery after the refugee crisis in the Mediterranean and wider Greek financial woes had dented demand in recent years.

Demand for destinations such as Cyprus, Bulgaria, Portugal and Croatia is also strong, according to the group. The same trend is being witnessed in the German market with bookings for Greece and Egypt significantly up on last year.

Both destinations have slashed prices for operators, airlines and visitors in order to aid their recovery and it appears to be working. This said, neither destinations have the bed capacity that Majorca does, so local hoteliers are just waiting for Greece and Egypt to sell out with the overspill coming to Majorca.