From COVID to war: The impact on travel costs
June 13, 2022
The pandemic still hasn't ended, there's a war in Europe and inflation is soaring. In challenging times like these, many people are longing for a vacation. Yet even going on holiday isn't as easy as it once was.
More than two years of the pandemic have left their mark on many people, prompting existential fears and job-related worries. Just as restrictions were lifted around Europe, Russia attacked Ukraine on February 24, sparking further unease and uncertainty around the world.
It's no wonder that many need a break. After all, a vacation is an opportunity to switch off and relax. But the current crises are also impacting the travel industry.
The rising cost of flights and hotels
Anyone looking for flights at the moment might be wondering why they seem to have gotten more expensive in recent months. Prices are indeed going up, and there are two reasons for this.
"Overall, the cost of gas is rising and the oil price is at record levels. Guests are also feeling this in the prices of airline tickets, which are becoming more expensive as a result," Johanna Tillmann of the German airline Condor told DW. After all, it's not just car owners who are paying more at the pump; airlines are also paying more for fuel.
"In addition, we currently see the result of pent-up demand for vacation travel. This has an impact on the pricing of flight tickets and accommodation, particularly in the high season, because (such prices) are based on demand," explained Tillmann.
Hotels also have to contend with higher costs. They have to pay more for oil, gas, electricity and food. Added to this, many hotels lack skilled workers. At the height of the pandemic, hotels were empty and many employees found other jobs.
To some extent, the hospitality industry must now create incentives — primarily financial ones — to recruit staff. The additional costs are passed on to guests in part through higher room rates.
What about package vacations?
Costs are also affecting so-called package vacations, trips where holidaymakers book a package consisting of various travel-related offerings, including flight, hotel and hotel transfer.
According to the German travel price comparison website, Check24, the package tours booked to destinations popular with German tourists are more expensive than they were last year. The average one-week package holiday for two people, booked in May for the months of June through August 2022 to Mallorca, Spain, is 17% more expensive than last year. "Despite the favorable prices, the price increase is most pronounced in Side and Alanya on the Turkish coast. There, a week-long vacation for two people this summer is now 45% more expensive than last summer" said Martin Zier, managing director of package tours at Check24, in an interview with DW.
Spending more on travel
Yet the higher prices haven't put everyone off spending money on travel. According to the German Travel Association (DRV), which represents Germany's travel industry, Germans travelers are simply spending more money now after two years of little to no travel, and they're booking more expensive trips. "Those who used to book only with breakfast now book all-inclusive, those who used to book three-star hotels now book four-star accommodations. And many vacationers are traveling longer than usual," explained Torsten Schäfer, press spokesperson for the DRV.
German airline Lufthansa has seen a similar trend. "It is currently difficult to get seats in Business Class and First Class. They are the first to be fully booked," said Lufthansa press spokesperson Bettina Rittberger. Many people have not been on vacation for two years, have saved up money and now want to enjoy themselves. According to the German Travel Association, flights to the Mediterranean, especially to Spain, Greece and Turkey, are in high demand this summer.
When it comes to package tours, Schäfer says stable prices are more or less guaranteed, since tour operators typically buy the contingents with the hotels and airlines the year before and in this case, economic conditions were more favorable then. Tourists who book early can therefore expect better prices. But if the tour operators run out of their previously purchased offerings and have to buy more, it could get more expensive.
Don't forget the additional costs
Travelers should plan for some additional costs this summer when considering their budgets. It may be that many restaurants, clubs and cafés at the vacation destination have increased their prices.
There's the rental car situation, too. In 2019, rental cars booked with the help of Check24 cost an average of just over €34 ($36) per day across 20 countries. This year, the average daily rate is approximately €74 ($79), i.e. more than a double.
And then there are non-financial factors that can currently make traveling more difficult. Similar to the hotel industry, many airports also lack staff. This has resulted in immensely long queues at security checkpoints, fewer staff at check-in counters for airlines, as well as a lack of ground staff who service airplanes.
At Amsterdam's Schiphol Airport, the situation is extreme. Some passengers have had to wait for hours to be checked in or board flights. To prevent the situation from worsening, KLM airline had to reduce ticket sales for flights to and from Amsterdam.
In short, anyone planning a vacation should do so early and not count on last-minute bargains — and not be surprised if the trip is more expensive than the previous year. If with good fortune, many holidaymakers this summer may be able to take time out from the crises, war or the pandemic, at least for a few precious moments. What the future will bring is anyone's guess.
This article was originally written in German.