Holiday price hikes

The euro has gained more than 10% since the beginning of this year.

So for holidaymakers heading to the Continent this summer the price of a few ice-creams and a cold beer is likely to be noticeably dearer than last year.

If you're travelling independently and paying for your accommodation in the local currency, you'll be hit hard.

A two week holiday in a villa in the South of France costing 1,954 euros would work out at £1,325 if you paid for it in January. To rent the same villa at current rates would set you back an addtional £145.

Package holidays

But what about if you've pre-booked and paid for your holiday - will you have to swallow surcharges from the tour operator?

Keith Betton from the Association of British Travel Agents says that package tourists are protected, but independent travellers are the ones who will suffer.

"Surcharge is a dirty word," says Keith from ABTA

He told us that most operators tend to hedge the costs of hotels, flights and aviation fuel and fix their prices as early as possible.

"We don't expect many to surcharge, only two out of around 800 members have requested to do so. If they want to do it, we would look for proof that they're incurring extra costs," says Keith.

Surcharges - the facts

Up to 2% absorbed by company

2%+ ABTA procedure necessary

10%+ customer can cancel

Your rights

According to package travel regulations, operators are obliged to absorb price increases up to 2% and then get permission from ABTA to place any surcharges for cost increases of 2% or more.

Travellers have the right to cancel their holiday if the costs rise by more than 10%.

According to Keith, surcharge is now a dirty word for most tour operators.

"You'll find very few of our members who surcharge. Fifteen years ago the industry was guilty of mis-using surcharges in order to make more profit.

"That's no longer the case. They don't do it because customers don't like it, competitors don't use them, and because most companies buy their requirements in advance, they don't need to."

The only occasions when ABTA members would consider surcharging would be after a severe swing in the currency or a fluctuation in the oil price that means aviation fuel goes up.

Small print

As always, it's worth checking the small print in the terms and conditions of your holiday.

Following action by the Office of Fair Trading on certain unfair terms in surcharching and cancellation rights, the main operators have been forced to be more generous to the customer.

If a company does reserve the right to charge extra if its costs rise, then the customer should expect a reduction if costs fall.

Next year's holiday

So no hidden charges for holidaymakers this year. What about next year?

Keith says: "People who bought this year's holiday have had their holiday at last year's rate, but next year's holidays will cost more.

"But it's a very competitive market so much of that increase will be shaved off."