Threat to cheap package holidays

Package holidays could become more expensive

Package holiday prices could rise by as much as £15 a head or the equivalent of £60 for a family of four, under travel company plans.

The Association of British Travel Agents (ABTA) wants a change in the law to allow tour operators and travel agents to cover the costs to the industry of the 11 September attacks.

Under current rules, surcharges are strictly limited.

ABTA said that the change to the rules was "unavoidable" and would help "the many small, specialist family businesses".

Gloomy picture

Present rules forbid operators from imposing surcharges within 30 days of a holidaymaker's departure.

They are also supposed to absorb at least 2% of the cost of a holiday themselves.

ABTA wants to change the 30-day rule to 20 days and scrap the 2%.

The proposed changes would not be retrospective.

They would also be a way for travel agents to claw back some of the costs, particularly as it is difficult to change published brochure prices.

A proposal to levy a surcharge has been under discussion at the ABTA annual conference in Lisbon, where travel agents are meeting.

Summer sun

Tour operators are particularly worried at the lack of bookings for holidays in 2002.

"Nobody is booking for holidays beyond Christmas" said Nigel Wright, managing director of holiday company Cosmos.

"People are making their holiday decision at the last minute."

Thomas Cook said that bookings to the eastern Mediterranean, Egypt and the US were down for this time of year, but were likely to remain depressed.

Bookings to western Mediterranean countries, such as Spain and France, however, were doing well.

Andrew Windsor, managing director of distribution business for Thomas Cook, said the company would be reducing the number of holidays it sold by about 15% next year.

Similar moves across the industry could increase prices further.