Holiday price war hots up as customers dream of the sun

The package-holiday market is hotting up, with tour operators promising major reductions as the travel industry enters its busiest six-week booking period of the year.

Budget Travel claims it will be "very significantly cheaper" in 2005 in an effort to win the price war against low-cost airlines and other holiday providers.

The company will today announce its prices for 2005, with holidays that will be substantially lower in price than similar packages in 2004, it said.

While the exact details of the new prices will not be revealed until 11 a.m. today, there will be "aggressive reductions", a spokesman for Budget Travel said, that could see some holidays costing 25 per cent less than last year.

These latest discounts follow the firm's announcement last October that from January 1st it would cut the commission paid to travel agents for selling its holidays by half, from 10 per cent to 5 per cent.

Most rival operators, including Falcon/JWT Holidays and Panorama and Airtours Holidays, continue to pay the 10 per cent rate.

Budget Travel's new strategies are necessary to compete with low-cost airlines, such as Ryanair, EasyJet and Aer Lingus, which are increasingly flying directly to package-holiday destinations and pay little or no commission to travel agents.

Earlier this week the company launched a new advertising campaign advising customers to ask specifically for Budget Travel prices, in response to concerns that travel agents were boycotting its holidays.

"We're warning customers to check the Budget Travel choices. We have done some blind testing and we have anecdotal evidence that some agents, particularly the smaller ones, aren't offering our holidays, and a number of agents have actually told us they won't sell them," the spokesman said.

It was particularly important, he added, that customers indicate they would like to see a Budget Travel price when purchasing their holiday, in light of the new reductions.

Customers can register for 2005 prices at shops from 9 a.m. this morning. Some have been queueing outside the company's shop on Baggot Street in Dublin since Christmas Day.

The marketing manager of Panorama and Airtours Holidays, Mr Eamonn Quinn, said customers would not see a significant price difference between Budget Travel prices and those of other operators.

"In the past number of years, prices have converged, and the price advantage Budget used to have has been whittled away," he said. "We'll be giving €5 million away in free child and adult places and free insurance, and a lot of our holidays are cheaper than last year".

A spokeswoman for Falcon/JWT said it offers a range of new properties, free child and grandparent places and special deals for single parents.