British holidaymakers are on tenterhooks ahead of the Government’s announcement this afternoon that will reveal which destinations will be “green”, “red” and “amber” when the foreign holiday ban is lifted on May 17.
Travel industry search, bookings and price data suggests that many UK travellers are already planning their summer holidays based on likely “green list” destinations or are, in fact, booking ahead.
Prices for flights from London to Portugal’s Algarve region were listed as at £200 more for travel on May 17 compared to the same route two days earlier, for example.
Online searches for package holidays were up 66 per cent on Thursday compared to the previous Thursday, according to Emma Coulthurst from TravelSupermarket.
“Some package holiday providers have their own planes to fly so they can control the price of the flight within the package. Others have negotiated fares with airlines a long time in advance,” Ms Coulthurst told Telegraph Travel.
“However, airlines – particularly the low cost ones – have a model which allows prices to rise as seats fill.
“There weren’t price hikes for package holidays last summer and package holiday providers need to sell holidays. It is in the industry’s interest to get people away. TUI, for example, has said this morning [...] that its packages are in line with last year’s prices and that it won’t be looking to put up prices.”
Independent travellers may note costs rising, however. Booking.com's chief executive Glenn Fogel told the BBC this morning that holiday "prices are already going up" on the accommodation bookings platform.
Securing a package holiday, as opposed to booking flights and accommodation independently, will offer the most security while travel restrictions are in flux. For those who choose to do so – and also those who choose not to – we’ve looked at some of the key questions on prices for green list holidays this summer.
Which destinations are in high demand?
Portugal is the most popular European holiday destination that’s still being tipped as a likely green list contender, with the likes of mainland Spain, France and Italy set to be categorised as “amber” in the initial traffic light lists.
Searches for “Portugal holidays” have increased 110 per cent over the past seven days, according to marketing agency SEO Travel.
Flight prices for Portugal have also spiked in the last few days following news that the Foreign, Commonwealth and Development Office (FCDO) dropped its advice against non-essential travel to the mainland and the Madeira islands (but not the Azores).
British Airways was on Thursday night charging £530 for a flight from Heathrow to the Algarve on May 17, compared with £234 for the same route two days earlier.
A Ryanair flight from Stansted to Portugal's capital, Lisbon, on May 17 was £152, compared with £15 on May 16. And EasyJet was charging £234 for a flight from Luton to the Algarve on May 17, when it had been just £73 the previous day.
The change in FCDO advice for Portugal is not a guarantee it will be “green” under the traffic light system, but it does open up travel. "It's basically saying that, on vaccination and Covid rates, the Foreign Office thinks it is a safe country," a senior industry source told the Telegraph. "Operators could not fly there if the Foreign Office didn't change its advice. It paves the way for significant travel to the destinations."
Malta, Israel, Gibraltar and Iceland are the other likely green-list destinations, according to industry analysis. Malta, Israel and Iceland will all initially have restrictions on Britons when foreign holidays resume: Malta will open its borders on June 1 (with proof of vaccination or a negative test for entry); Israel is to limit travel to group tours from May 23 and only open to independent tourists from July.
Iceland, another prime candidate, requires even vaccinated travellers to quarantine until they have taken a PCR test to prove they are negative for Covid. Other visitors are required to take a test on arrival and quarantine until a second negative test result on day five or six.
Gibraltar is one of the few "green list" contenders that will allow Britons without a PCR test, but has limited capacity for any surge in tourists
What are prices like for the May half-term holiday?
Prices listed for these likely green-list destinations this morning (flying Saturday May 29 and returning Saturday June 5), included:
Return flights from London Gatwick to Gibraltar starting from £211. Return flights from London Heathrow to Malta starting from £526.
Return flights from London to Tel Aviv from £111.
As it stands, of these destinations, only Gibraltar will be fully open to Britons for the half-term holiday.
Will demand outstrip capacity?
This is unlikely, according to John Grant, an aviation analyst with global travel data provider OAG. He told Telegraph Travel: “The inevitable jail break rush of demand will inevitably lead to prices increasing at least in the short term. However, there is plenty of capacity available from the airlines and with a degree of flexibility there will be some great fares available for travellers.
“After the immediate crush of booking activity then the market will settle back and at that time airlines will seek to build back demand with some very attractive fares if the traveller can wait a few weeks.”
He went on to offer comparisons for bookings and capacity for flights to European destinations in June 2019 and June 2021. Flights booked from the UK to Portugal for this June are down 92.4 per cent compared to flight bookings for June 2019. Flight capacity for services from the UK to Portugal for this June, however, are only down 52.7 per cent compared to capacity in June 2019. Mr Grant suggested that this shows that there is plenty of capacity, as it stands.
Are there any other reasons for price hikes?
The impact of the pandemic and resulting travel restrictions on the earnings of airlines could be one factor. British Airways owner IAG has reported a €1.2bn (£1bn) pre-tax loss for the three months to the end of March, citing travel restrictions caused by the pandemic and forecasting only a small rise in capacity to 25pc for the April-June quarter.
IAG also owns Iberia and Vueling in Spain and Aer Lingus in Ireland. IAG chief executive Luis Gallego said sales of seats in the three months between April and the end of June remained at 25pc of levels in 2019 and that governments must step up to provide support for reopening.
There are other signs that consumers will face higher flight prices this summer, after a tough 14 months for airlines and airports. On April 27, Civil Aviation Authority (CAA), which regulates the UK's aviation industry, granted Heathrow Airport permission to raise £300m by increasing passenger fees to help it recover from losses incurred during the huge downturn caused by coronavirus.
The allowed increase will only add about 30p to the airfare of each customer using the airport.
Nick Trend, Telegraph Travel’s consumer editor, explained: “[Heathrow] is currently only operating two out of five terminals and has seen traffic fall by over 90 per cent year on year. It – like other airports – will certainly find other ways, from parking and drop-off charges to vending machines and paid-for priority channels to raise money to cover the huge shortfall incurred in 2020.”
He added that another UK airline, Jet2, last month forecasted losses of up to £385m during the year ending March 31, 2021. “During the year it was forced to raise £1bn to cover the huge costs of cancelling flights and returning passengers’ money. That has to be paid back somehow, and – eventually – it will surely be through higher fares.”