Seven package holiday firms could ask you to pay more after booking if Brexit increases costs
Holidaymakers who've booked packages with at least seven major travel firms could have to pay a surcharge of up to 8% if Brexit significantly increases costs, MoneySavingExpert.com can reveal. But other firms are making 'Brexit promises' to customers to protect them from hikes.
Under package holiday regulations, companies are allowed to hike prices after a customer has booked if they warn they may do so in their terms and conditions, and if the increase is to offset changes to exchange rates, fuel costs, taxes or fees. This is often called a 'surcharge' in the T&Cs. Firms can pass on increases of up to 8% without allowing you to cancel penalty-free, so families on more expensive holidays could have to pay £100s extra.
It's very unusual for package holidays to add surcharges, and these rules apply at all times. But with uncertainty over Brexit, travel firms say customers are now asking questions around what will happen after 29 March. There have already been significant currency swings relating to Brexit – for example, back in 2016, Mark Warner Holidays blamed currency fluctuations after the EU referendum when it levied a surcharge of up to £50 per person.
We asked 15 major package holiday firms whether customers who've already booked or book between now and 29 March could be asked to pay more:
- Five firms haven't ruled out surcharges. They are Easyjet Holidays, Jet2 Holidays, Lastminute.com, Loveholidays and Virgin Holidays.
- Two firms haven't ruled out a surcharge in some cases. Teletext Holidays said there will definitely be no surcharge if you booked before 12 February 2019, but wouldn't rule it out for those who've booked since. Thomas Cook has a 'Brexit promise' that applies to packages with flights on Thomas Cook Airlines, but won't rule it out for other packages.
- Eight firms promise you WON'T have to pay a post-Brexit surcharge. Balkan Holidays, British Airways Holidays, Brittany Ferries Holidays, First Choice, Olympic Holidays, On the Beach, Saga and TUI told MoneySavingExpert they will definitely not increase prices (though some technically have a clause in their T&Cs allowing them to do so).
What are the rules?
Under the Package Travel and Linked Travel Arrangements Regulations 2018, the price of a package holiday booked after 1 July 2018 may be increased up to 20 days before the start of the holiday, so long as the possibility of price rises is mentioned in your contract and the change is linked to one of the following:
- Increases in transport costs due to changes in fuel prices or other power sources.
- Changes in taxes or fees on travel services imposed by third parties not involved in the performance of the package, eg, tourist taxes.
- Exchange rates relevant to the package.
In theory, firms can levy a surcharge of more than 8%, but if this happens travellers can cancel their holiday penalty-free.
It's worth noting that members of the Association of British Travel Agents (ABTA) won't pass on small price increases to you, as the ABTA code of conduct says they must absorb any price rises up to 2%. You can check which firms are members on the ABTA website.
Despite the name of the regulation mentioning 'Linked Travel Arrangements', it's worth noting these surcharge rules only apply to full package holidays. Linked travel arrangements – DIY packages where you buy the elements in separate transactions but in the same website visit – aren't covered. See our Holiday Rights guide for more on the difference.
Which firms are promising prices won't rise?
|Company||Will it rule out Brexit price rises?||Further details|
|Allows for price rises in its T&Cs, but told us "all holidays booked pre Brexit [before 29 March] will be honoured in full and no surcharge will apply".|
|British Airways Holidays||Yes||Says it "never increases prices" after a customer books, and its T&Cs don't allow for surcharges.|
|Brittany Ferries Holidays||Yes||Says "the price you pay today is guaranteed not to rise as a consequence of the UK's exit from the EU." Its T&Cs don't allow for surcharges.|
|Allows for price rises in its T&Cs. Says it has "never added any surcharges to its package holiday prices and has no current plans to change" this position, but would not guarantee no price rises.|
|First Choice||Yes||Allows for price rises in its T&Cs. Says "no matter what happens with Brexit, we will not increase the price of our holidays after they have been booked."|
|Jet2 Holidays||No||Says "in line with many other UK tour operators, we state our right to surcharge within our terms and conditions. Surcharges are tightly controlled by law and we fully comply with these regulations." Its T&Cs say it "reserve[s] the right to change the price of your holiday."|
|Lastminute.com||No||Allows for price rises in its T&Cs. Says "we follow the regulation which allows to pass on price increases to customers in certain circumstances", but says this would be "very rare".|
Allows for price rises in its T&Cs. Says it "wouldn't look to increase prices", but that it can "never guarantee" against some events.
|Olympic Holidays||Yes||Says it guarantees not to increase prices once a booking is made, no matter what happens to exchange rates or the price of fuel. Its T&Cs say: "The price of your holiday is fully guaranteed and will not be subject to any surcharges."|
|On the Beach||Yes||Its T&Cs don't allow for surcharges. It says booked holidays "will not be subject to any price increases – either as a result of Brexit or otherwise."|
|Saga||Yes||Allows for price increases in its T&Cs, but says it has a "Brexit promise" so that if you book before 29 March for this year it guarantees "the price today will be the price you pay".|
|Teletext Holidays||Depends on date of booking||Allows for price increases in its T&Cs for post 1 July 2018 bookings. Says that if you booked before 12 February 2019 then there'll definitely be no surcharge applied to your booking, but it couldn't guarantee the same for later bookings. It says the company is discussing at "board level" whether a surcharge could be applied.|
|Thomas Cook||Depends on the booking||Allows for price increases in its T&Cs. Says it has a "Brexit Price Guarantee" which means the price of its holidays "won't go up" after you've booked – but this only applies to packages that include a flight on Thomas Cook Airlines (the majority of its packages).|
|TUI||Yes||Allows for price increases in its T&Cs. Says "no matter what happens with Brexit, we will not increase the price of our holidays after they have been booked."|
|Virgin Holidays||No||Allows for price increases in its T&Cs, though says it "will absorb 2% of any increase in cost" (as it's an ABTA member) and it doesn't "anticipate any price changes due to currency fluctuations".|
What are my rights if I've already booked?
ABTA says surcharging is relatively rare, and none of the firms we spoke to said they have any plans to charge extra. We also don't know what will happen with Brexit, whether or not the UK Government will strike a deal with the EU or if there'll be any currency fluctuations or other travel disruption – so surcharges are a distant prospect for now.
But if you have booked with a company that reserves the right to increase prices, it could increase the price of your holiday by up to 8% in certain circumstances. If it increases the price beyond this, you'll be able to cancel and get your money back without paying a fee.
It's also worth noting that the firm can only increase costs at least 20 days before you're due to travel. The company must also justify why it is increasing the price to you.
If you are asked to pay a surcharge on your package holiday booking, check your travel company's T&Cs to see if they reserve the right to do so. If they don't, they can't.
If you're upset with how a firm's behaved, you can complaint to it directly. If it's an ABTA member, you can escalate your complaint to ABTA.
Finally, it's worth noting given the current Brexit uncertainty, booking your holiday as a package gives you additional protection in the event of any post-Brexit travel disruption – much more so than if you'd booked flights, hotels and other parts of your holiday separately. For more info, see our Will your travel insurer cover your holiday against Brexit flight disruption? MSE News story.
'It's good to see some firms Brexit-proofing holidays'
MoneySavingExpert news and features editor Steve Nowottny said: "The prospect of package holiday firms adding surcharges may seem relatively unlikely for now, but with the current Brexit uncertainty it's important holidaymakers are fully aware of their rights and the circumstances in which prices could be increased.
"It's good to see some firms are tackling customer concern head-on by guaranteeing they won't levy surcharges. If you are booking a holiday in the next few weeks and are concerned about the implications of Brexit, one option is to go with a firm that has a 'Brexit promise' – though make sure you fully weigh up the pros and cons and factor in any additional cost."
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