Has Covid-19 killed off cheap holidays? Why overseas travel will cost more after the pandemic
- The days of budget holidays may be behind us as tourism heads towards a reboot after the pandemic
- With car rentals, airfares and accommodation all costing more, pricey Covid-19 tests and insurance, and tourist taxes, trips are set to get more expensive
The longer the wait for travel restrictions to be lifted, the more time some of us spend scouring websites and blogs in search of inspiration.
Our meticulously researched long-haul odysseys and short-haul minibreaks aren’t going to happen any time soon but when we do finally get the all-clear, that first overseas trip could be among the most painstakingly prepared journeys we’ve ever planned.
And it seems increasingly likely those trips will be considerably more expensive than holidays of the past. Granted, there are a few bargains around as companies kick-start the recovery with discounts aimed at tempting travellers out of their armchairs, but this will probably be temporary.
By the time Hongkongers eventually take to the skies, tourism will probably be a lot more costly than it once was. Here are a few reasons why.
Car rental fees have gone through the roof for a number of reasons. Not wishing to be caught out with an excess of supply at a time of limited demand, hire companies sold many of their vehicles as the pandemic took hold in 2020.
Some remain wary of increasing their fleet sizes, even in those places experiencing a flood of freshly vaccinated customers.
Other factors that have led to rates more than doubling in some countries include industry behemoth Hertz declaring bankruptcy, which pushed up competitors’ prices. The company, which also owns the Thrifty, Dollar and Firefly brands, has since been restructured.
Covid-19-related overheads such as deep disinfection of vehicles are passed on to the customer and the cost increases don’t stop when you hit the road. Petrol prices are at all-time highs in Europe, the United States and Asia.
City-break sightseers who might be tempted to skip the self-drive option and rely on ride-hailing apps such as Uber should think again. Many drivers don’t fancy risking their health for a modest reward and customers are finding there aren’t enough cars to go around.
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As a result, waits are longer and fares have soared as companies offer bonuses and other incentives in a bid to entice reluctant drivers back into their virus-incubating workspaces.
The consolidation of airlines and travel companies is also having an impact on holiday costs. The laws of supply and demand suggest that retiring aircraft early, combined with the shutdown or bankruptcy of dozens of carriers (Cathay Dragon, Virgin Atlantic and Philippine Airlines among them), is likely to result in higher fares.
For example, reduced competition caused increased prices when industry giant Thomas Cook went to the wall in September 2019.
Another factor that may lead to a rise in economy airfare prices is an absence of business travellers, who, having realised Zoom calls save time and money, may no longer fly as much and thus stop subsidising the cheap seats.
Social distancing means space is at even more of a premium than usual and holidaymakers who can afford it have been booking self-contained accommodation to sidestep coughing, sweating guests in hotel corridors. Stand-alone holiday homes don’t rely on shared air-conditioning systems, either. Over the past 18 months, rental property rates have spiked like a poorly contained Covid-19 outbreak.
Speaking on a BBC radio programme recently, Britain’s transport minister, Grant Shapps, said, “I think double vaccination or full vaccination is going to be a feature for evermore, and probably all countries will require full vaccination for you to enter.”
The jabs might be free but the real-time RT-PCR tests required on arrival are not. Lateral flow tests are cheaper, or free, but aren’t usually accepted for incoming passengers. In addition, a number of governments insist that travellers buy pricey bespoke health insurance that covers Covid-19-related medical expenses.
A number of destinations, including Bali, St Lucia, Zimbabwe and Cancun, are planning to introduce a tourist tax. And beginning in 2022, Thailand will collect a 500 baht (US$15) fee, with the proceeds going into a tourism transformation fund that authorities say will help the Southeast Asian nation move from a mass-market honeypot to a high-value, environmentally sustainable economic model.
Which brings us neatly to the “post-Covid-19 reset”, a far-reaching tourism overhaul touted by many industry stakeholders. Thailand is not alone in devising a blueprint to attract wealthier visitors who, it is hoped, will pay the real cost of their holiday – one that is economically, socially and environmentally sustainable.
Paying more could pave the way to fairer wages for hospitality staff. We have long been familiar with the Fair Trade label – we spend a little extra for certified products so tea pickers and banana farmers can be paid a living wage. There is no reason tourism workers shouldn’t be similarly compensated.
In pre-Covid-19 times, budget airlines were able to squeeze a profit out of flights of US$30 or less (because passengers paid for extras such as food and drink, duty-free items and luggage). But the aviation industry is under increasing pressure to go green, the colossal cost of which is destined to make discount tickets a thing of the past.
With the European Union considering a tax on polluting aviation fuels, especially kerosene, higher fares may be with us sooner rather than later. This could result in tourism reverting to the luxury status it enjoyed in the mid-20th century – the so-called golden age of travel.
So much for AirAsia’s feel-good slogan “Now everyone can fly”. Closer to the mark might be the alternative “Reassuringly expensive”.
