Wednesday, 7 May 2014

Holiday Prices

From the Telegraph

David Cameron has accused travel companies of "deliberately" putting up prices during school holidays and called on head teachers across the country to stagger their term dates to help families with young children.

The Prime Minister said that he shares the “frustration” of parents who face higher bills for breaks taken during school holidays.

Well, yes, they do "deliberately" put up prices. They know the demand is going to be higher then and so they make as much money as possible. Like any other business with a brain. I doubt he "shares my frustration", though as his wife has an estimated £30m fortune, which means that a few grand on a holiday isn't going to make much of a dent.

Mr Cameron said that he himself has had to cope with higher ticket prices from low-cost airlines such as Easyjet and Ryanair because of increased demand during school holidays.

Who sell every ticket. Right.

Mr Cameron said that more “competition” in the holiday sector is “absolutely key” to driving down prices.

So why do the Conservatives oppose the building of a 3rd runway at Heathrow? I'm sure that Ryanair, Easyjet or someone else would happily buy up the planes that would allow more people to fly off to Benidorm or Faro and increase the supply that would create more competition.


A K Haart said...

"Well, yes, they do "deliberately" put up prices."

As opposed to doing it accidentally. I don't think Cameron cares whether he makes sense or not.

Mark Wadsworth said...

Wrong, they don't up their charges during high season - that's the normal price. What they do is drop their prices out of season.

Bayard said...

Mark, he's a politician. What's the truth got to do with anything?

DBC Reed said...

My memories of awful Greek hotels I occupied in my youth include the official notice on the back of the room door giving the permitted nightly charge.

It would n't be so difficult to average the occupancy rate/nightly rate ratio and stick a price on door that was a bit higher than rock bottom but lower than the fleece-the-captive-market ,school-holiday rip-off, but which keeps the hotelier in business with a continuous steady return.

I know in faux liberal land, capitalists (what else can you call them?) never whack up hotel prices but they did with the Olympics in London and do when there's a big rail strike and people have to stay in Town.

It would help if the capital asset value of hotels (land/location)was n't so extortionate.

I can't see that the theory 's much different from rent controls, which do not appear to be the disaster they're cracked up to be.