Europe hols ‘too pricey'

Britons are being priced out of holidays on the Continent, where average hotel prices have risen by up to 50 per cent in the past year, according to new research...

The weakness of the pound has been blamed for the sharp rise in average room rates across Europe's most popular cities.

It has fallen by 13 per cent against the euro (from €1.27 to €1.12) since May last year. But according to a monthly hotel price index compiled by Trivago, an online comparison website, the rates British travellers are quoted have increased far beyond these currency fluctuations. 

Compared with May last year, average nightly rates this month have increased by £60 in Venice, £54 in Geneva and £47 in Nice. Rates in Frankfurt, Cannes, Rome and Munich have all risen by a third over the same period.

The index, which is based on 40,000 daily price inquiries for overnight stays, is one of the travel industry's most comprehensive price monitors. Overall, the price of a stay in a double room in Europe's 50 most popular cities will cost an average of £107 this month - 15 per cent more than in May 2008.

Rates in Spanish and Greek cities showed the smallest increases. Hoteliers in both countries have responded positively to calls from tour operators to lower their prices in the face of the recession. Seville and Valencia were among only five cities to have cut rates, by £51 (to an average of £102), and £3 (to £78) respectively; rates in Madrid were unchanged.

There has been a marked decline in the number of British visitors to the Continent this year. Eurostar, which has enjoyed months of successive growth following its move across London from Waterloo to St Pancras, reported recently that passenger numbers fell by 11.5 per cent between January and March, to 1.92 million, compared with the same period last year. In March, the tour operator Inghams cancelled its entire summer city breaks programme owing to lack of demand. This week Xcapewithus, which sells accommodation, went into administration, affecting up to 10,000 British holidaymakers. The Majorca-based company blamed currency fluctuations - particularly the high cost of the euro.

This week, EasyJet, used by many travellers on city breaks, reported a pre-tax loss of £117 million.

According to statistics released this week by Price Waterhouse Coopers (PWC), the accountancy firm, 78 travel companies have failed in the past 12 months - compared with 49 in the previous year.

Ian Oakley-Smith, a Director at PWC, said that the full effect of the recession will not be felt until autumn, when cash flows slow following the peak summer period.

"The travel industry is almost unique as it holds consumers' cash months before it delivers the product," he said. "It is therefore easy to mistakenly believe that the business is cash-rich. In reality, a lack of bookings can catch up with cash flows very quickly."

Thanks to the weak pound, breaks in Britain finally look like good value in comparison with holidays on the Continent, and record numbers are expected to stay at home this summer (see right). Those who are planning to go abroad are increasingly looking at longer-haul destinations.

Expedia, the online travel company, said six long-haul cities were among its 10 most searched-for destinations on its website last month.

The Post Office reported that, among foreign currencies, demand was growing fastest for the

Kenyan shilling, the East Caribbean dollar, the Jamaican dollar and the Indonesian rupiah.

Source: www.telegraph.co.uk