Holiday costs are on the rise, so how can you save money?

Booking before future price hikes kick in, going all-inclusive to be certain of the cost, travelling out of season or midweek to save a few bob and actively seeking out new routes from Ireland are just some of the steps people should be looking to take if they want find the best value for money holiday this summer, according to the travel industry people in the know.

While bad news is almost ever-present in our world, the good news when it comes to international travel is that 2023 is shaping up to be a very fine year. The pandemic and all its side effects – including Covid certs, airport delays and car hire shortages – appear to have “washed through the system”, and a sense of normality is returning. According to a survey from travel insurer multitrip.com published this week, more than 80 per cent of Irish holidaymakers say their travel habits are back to where they were pre-Covid, with 87.3 per cent of those polled saying they plan to take two or more holidays in 2023.

Eight in ten say they are now “very or extremely comfortable” to travel. But almost half say Covid has affected their approach to travel, with most concerned over delays, queues and cancellations at airports. Such concern is not entirely misplaced, and while things are definitely looking up across the board, tourism is still in recovery mode and the cost-of-living crisis is being felt everywhere, while popular destinations across Europe are struggling to find the people to do the jobs that make the tourism machine tick.

“The cost of accommodation is continuing to rise, and there are labour shortages, and the spiralling cost of energy is a problem everywhere,” says travel writer Eoghan Corry. “Contracts tour operators have are being cancelled and then renewed at higher prices, so that is a bit of a mess. The energy problem is a big problem for accommodation providers, and we have seen hotels that just didn’t reopen because of staffing; that is as big an issue all over Europe as it is in Ireland.”

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He says trends established last year, which saw Irish people return to the traditional haunts of Spain and Portugal, are likely to be repeated this summer, with Greece also likely to prove popular. But he believes people looking for value will still find it, particularly if they pay close attention to the new routes out of Irish airports.

[ Tighter budgets, TV-themed breaks, solo trips and working-holidays: Travel trends to watch out for in 2023 ]

There are more than 20 new routes from Dublin to destinations across Europe; not all of them will be attractive to conventional holidaymakers, which means they often offer better value than more popular destinations. “It takes at least 12 months for a new route to become established, and the cheapest prices are often to be found in that first year,” says Corry.

He highlights flights to Brindisi in the heel of Italy, and Kos in Greece, which will be serviced by Ryanair and Aer Lingus for the first time this year. “They are new routes and have two airlines competing, so they are likely to be ones to watch. Sardinia is also worth keeping an eye on; Ryanair have been flying to Alghero for years, but Aer Lingus have launched another route to the island.”

Mary Denton is the chief executive of Sunway Travel, one of the many operators that endured a nightmarish pandemic. She is upbeat about the year ahead, and expresses a degree of surprise at how strongly some areas Sunway offers have recovered. Cruise holidays, in particular, have bounced back much faster than many would have anticipated.

In the early days of the pandemic, cruise ships became the epicentre of the virus, with large floating resorts hosting thousands of passengers stranded offshore unable to land because of outbreaks on board. That has been confined to the history books, and “we are out the door” with cruise bookings, says Denton. “They are through the roof; there are more cruises now than there ever were, and I can see why: they are great for families, great for couples and a great way of seeing places.”

Cruises are also all-inclusive, which makes it easier for people to budget their spending at a time when inflation is flirting dangerously with double digits.

Prices are ‘less expensive in Morocco and Turkey. And people can save money by flying midweek. They have to be clever about it. Flying on a Wednesday to Malaga as opposed to a Saturday can knock at least €60 off the price of the ticket, while flying in the afternoon will save a few quid’

—  Mary Denton, chief executive of Sunway Travel

According to Paul Hackett, president of the Irish Travel Agents Association (ITAA) and the owner of online travel agency Click & Go, there has been a noticeable surge in all-inclusive deals as the cost-of-living crisis deepens. The upfront cost might seem high, he says, but at least tourists know exactly how much things are going to cost, and can pay for it over a period of months.

He stresses that it “is really important to get the all-inclusive resort right”, and advises people to look at dedicated all-inclusive rather than ones that mix and match, as the former tend to be better equipped. It is also wise, he says, to pick a resort that has “multiple pools and other areas for people to keep themselves amused, as you will want to spend a lot more time on the site because you are on an all-inclusive deal, so it has to be good”.

He also points to a surge in early bookings and payment plans, as people do what they can to offset the rising cost-of-living here and there. “Last year no one wanted to commit early because of Covid, there was still antigen testing at the end of April, but now all the heavy lifting is done and people want to lock in at prices today rather than wait for them to rise,” he says.

[ Overseas travel close to pre-Covid levels as pandemic fears ease ]

Hackett is more upbeat than at any point since 2019. “The buzz is back and it’s tangible; it has been great to hear how busy the office is and to hear the phones ringing,” he says. “Interest is across the board, but Spain is massively popular among Irish people. It is 20 destinations in one, with the islands and the Costas and the cities, and so many flights to there from here.”

He says operators in tourist resorts are upbeat. “They are experiencing all the challenges that we have here, but they had a really rocking 2022 and even though pricing for peak season is high, it will sell out.”

Denton agrees, and while the cost-of-living crisis has touched every home, many people will prioritise their summer break this year. As well as Spain, Portugal, the Canaries and Turkey, Denton says Morocco is also selling really well, as are the Maldives, Mauritius and Florida for longer-haul holidays.

She cautions that people can expect to pay more. “The fundamental part of the holiday is the flight and the accommodation, and prices have climbed. Airfares are up at least 15-20 per cent on last year. In 2022, airlines were more interested in selling tickets and getting bums on seats, but they are being hit with the costs. Hotels on the ground are getting hit with costs as well, and prices have gone up, and that is what is driving people to book early. There is value to be found if you are savvy enough about it.”

Airlines are not going to offer anything for people who can’t travel because of Covid, so it means travel insurance is more important than ever

—  Travel journalist Eoghan Corry

So how can people save money?

Travelling outside of the peak months of July and August is where you can “really see the value”, says Hackett.

Denton agrees. She says a holiday for four in Portugal in August will cost from about €2,500, but prices are “less expensive in Morocco and Turkey. And people can save money by flying midweek. They have to be clever about it. Flying on a Wednesday to Malaga as opposed to a Saturday can knock at least €60 off the price of the ticket, while flying in the afternoon will save a few quid.”

When asked about car hire issues, Hackett’s assessment is brief. “Sorted, no issue, back to normal. Like so much of the negativity, it has washed through the system.”

Corry is not so sure. “Car hire is still a problem, and while I don’t think the madness of last year will be repeated, the car hire fleets across Europe are still not meeting the demand that is likely to be there. There are ways around the higher cost of car hire – particularly if you look at small providers away from airports, but that can be messy.”

[ Travellers face higher air fares as industry recovers from pandemic ]

Corry also cautions people to ensure their travel insurance is adequate, and has Covid cover as standard. “Airlines are not going to offer anything for people who can’t travel because of Covid, so it means travel insurance is more important than ever,” he says.

While many people might be booking early, Jo Rhodes of Which? Travel cautions people against booking in a rush in the belief that the deals will disappear. “It’s important to shop around and not feel rushed into making a decision,” she says. “Time-limited deals aren’t always everything they promise. In fact, when Which? analysed these kinds of offers in the past, we found that, in more than half of cases, they were the same price, or even cheaper, after the sale ended.”

She says it is often possible to find bargains throughout the year on routes where airlines are keen to fill seats, and suggests setting up a price alert to help find out when fares fall. “Whenever you choose to book, opt for a provider with a good flexible booking policy, and take out comprehensive travel insurance from the day you book to cover you in case you are unable to travel.”