As the cost-of-living crisis rages on, package holidays are proving attractive for those wanting more certainty over what they spend on travel. Rose Dykins reports
At a time where consumers are facing unprecedented financial pressure, but are reluctant to forgo travelling abroad, package holidays are set to soar in popularity in 2023.
This is given the extra layer of certainty that comes with the fixed price of an all-inclusive trip in the face of inflation, and the reassurance that food and drink costs are already accounted for.
Global revenue generated from the package holiday industry is set to grow annually by 3.9 per cent from 2023 to 2027. The result will be a projected market volume of more than US$326 billion by 2027 (up from approximately US$280 billion in 2023).
According to insights from ABTA, 29 per cent of British people are planning on taking an all-inclusive holiday in 2023 to help them manage their finances. This figure rises to 40 per cent for those aged 44 and under, and to 57 per cent for those with young families.
ABTA says the Canary Islands, the Balearics and Turkey are set to be among the top destinations for all-inclusive trips in 2023.
The travel agent association also reveals one of its members, Club Med, has seen all-inclusive bookings become the most popular option for the 2022-2023 winter sports season for the first time – overtaking self-catering options.
However, in line with soaring demand, the cost of package holidays is rising. According to figures from Which?, those booking a summer 2023 package holiday between November 1 2022 and January 3 2023 will have paid 19 per cent more on average than they would have for a summer break in 2022.
The Which? research shows that a week-long trip to Greece costs 30 per cent more in 2023 than it did last year, while a holiday of the same length to Italy, Spain and Turkey has become at least one fifth more expensive.
At the same time, Which? says better-value package holiday options can still be found. Looking at six popular destinations for British travellers, its research reveals Portugal has experienced the smallest year-on-year average price hike for package holidays of 7 per cent to £705 per person for a week-long holiday.
Meanwhile, Spain offers the cheapest package trips, with a week-long holiday costing £693 per person.
While the package holiday market has been a prevalent option for low-income travellers for some time, many middle class consumers are experiencing a new level of financial stress that will be impacting their travel choices.
Additionally, as the rising costs of food and drink makes self-catering travel less of a cheap option in some markets, travellers will find reassurance in knowing that their travel will be within their budget (or as close to that as possible).