A new report by Mintel indicates that VAT increases and higher fuel costs which will make holidays more expensive from next year could cause another dip in the market.

“Recovery is not a word that can be applied to the holiday market in the coming five years,” it warned.

“Higher holiday prices due to high VAT will hurt the market as the costs of low-cost flights are increased.”

The spend on overseas holidays is forecast to rise by 17 percent over the next five years, this is much more than it has risen in recent years but this will be because of higher holiday costs.

“In constant price terms, expenditure on holidays will decline by 1.6 percent between 2010 and 2015,” it said. “Changing exchange rates and higher fuel costs will play a major role in holiday prices in the coming years and higher prices will limit volume growth.”

The report also suggests that if low-cost flights disappeared, those most likely to cut down on their travel would be the ABC1 pre-/no family group. The two markets that would be most affected would be overseas city breaks and holiday homes.

The report concluded: “In the coming years, while beach and family holidays will continue to dominate the market, more diversification will be seen in holiday types. Niche products/destinations will see the fastest growth.”

European travellers will have to pay an extra $14 from September for electronic visas to visit the US.

Known as Electronic System for Travel Authorisation (Esta), the visas have been compulsory for UK tourists and other European visitors since January 2009 but have been free so far.From 8th September the US will start charging $14, or around £9 based on the current exchange rates.

The European Union has criticised the move, claiming that it could deter or complicate travel and consumer groups are advising people planning a trip to the US to apply now to beat the charges as the Esta lasts for two years, or until a person’s passport expires.

“Anyone even mulling over going to the USA should urgently go and fill in their Esta right away.

“It is rather strange this fee is mainly going to promote US tourism. You would’ve thought keeping it cheaper to get in would help more – after all, it’s free for most Americans to come here.” said Martin Lewis, MoneySavingExpert.com creator.

Visit USA said although it did not support any taxes on tourism, it was relieved at the price set.

“We had expected it to be around $17-20, so we were pleasantly surprised that it is $14, which comes in at around less than £10 a head with the exchange rate,” said a spokesman.

The price is set at $14, so consumers should be wary of bogus websites charging higher rates.

What do readers of this blog think about this tax? Is it something we should adopt too or will it complicate or deter people from travel as the EU points out? Comment below.

A recent survey by a travel website found that nearly 75% of holidaymakers said they plan to fly with smaller bags or just hand luggage in order to avoid charges and possible fines.

Over 40% of the respondents to lastminute.com’s survey said they are now confused by new rules on taking bags onto an aircraft, and a fifth said they had been caught out by new regulations and been fined accordingly.

Have any of you been caught out by the new rules and regulations? We’ve tried to cover news of such regulations on the blog as they come to light to prevent travellers from being stung by avoidable fines. A blog that continues to be relevant includes recent airline price hikes and also tips to beat or lower them, view the full blog here.

Below is a chart showing the average costs of carrying a single bag within the hold on a low cost airliner (flying short haul) sourced from MoneySupermarket.com April 2010. The figures are for return flights.

Jet 2 £24

Thompson £23

Flybe £20

Easyjet £18

Monarch £26

Aer Lingus £8

Thomas Cook £16

BMI Baby £28

Ryanair £40

Average £22.55

£28million are wasted by tourists who buy euros at UK airports a recent survey by the Royal Mail Group states. This equates to around £16.60 per family in low exchange rates.

Sarah Munro, Post Office Head of Travel Money, said: “We compared rates at five UK airports with those available in Post Office bureaux de change branches and found that tourists buying at the airport would get far fewer euros for their pounds. In fact families changing £286 into euros at the airport face losing over £16 – enough to buy a round of drinks and eight ice creams in Portugal, summer 2010’s best value destination.”

The pound has rallied by almost 10 per cent against the euro since it sunk to a 2010 low in March, and is now worth four per cent more than a year ago.

Euros are available over the counter at 8,700 Post Office branches, while over 70 currencies can be pre-ordered for next day branch collection at all 12,000 Post Office outlets or online at postoffice.co.uk. Home delivery can also be requested online.

Money Saving Expert has created its own impartial website to compare exchange rates for different places, it also includes tips for travel insurance and cheap flights.

The budget airlines are hiking their prices again! The last blog I did was on Ryanair’s baggage hike to £20 each way (which can be read here) and it seems that some of the other low cost airlines are hiking their various fees as well. Sticking with Ryanair, it will charge you £40 to check in if you forget to print out your boarding pass online, rather than £10, so make sure to bring your print outs!

EasyJethas changed it’s baggage checking to £9 for pre-booked luggage and £18 if you don’t pre-book. It’s also useful to know that they have also added a charge of £1 for credit-card bookings.

Flybe has also added a £9 charge per person for return flights if you book by credit card. They have also increased their baggage checking fees.

There are some tips from moneysavingexpert.com which can help to reduce and avoid many unnecessary charges which I think are particularly helpful to keep costs down:

• Avoid charges of up to £10 for paying by credit or debit card by using a pre-paid Visa Electron for most airlines and a pre-paid Mastercard for Ryanair.
• Keep an eye out for insurance automatically being added on to your journey, if you do not want this make sure you un-check the box.
• There is often a free 10kg hand-baggage allowance for budget airlines, so take advantage of this if you are going for a short time by packing sensibly and wearing your heaviest clothes on the flight.
• Moneysavingexpert.com has an excellent resource for finding the cheapest flights around with it’s FlightChecker tool which can be found here.

If anyone else has any more money-saving tips and ways to avoid charges etc, then please post them here!

I have just written a piece for the next Holiday Villas magazine about how to really get one of those ‘free’ trips advertised by Ryanair. Here’s the gist of it:

Firstly, you need to get yourself a Visa Electron debit card. Then, you book and check in on line using this card. If you use any other debit card or credit card they will charge a £4 booking fee for each person checked in. If you use the Electron card, it really is free (sorry if this sounds like a puff for Electron cards. I don’t get commission!) If you put in the card details, the ‘cost’ will come up as £0.00!

OK. You’ve got the card from your bank. Are there any other snags you need to know about before you start the booking process? Well, yes, there is a problem but it’s not too weighty. Quite light, actually. If you check in on line to get your free flight, you are only allowed to take hand luggage with you – that’s just 10kg in a holdall or cabin trolley bag. 

Can you travel that light? You probably can, though most people think they can’t. Remember that your villa or apartment will be equipped with a washing machine, towels, probably a hairdrier and possibly, toiletries. Books are often available, too (there are plenty in the flat I rent out, from Danielle Steele to Ian McEwan and Chimamanda Ngozi Adichie, plus DVDs and even Scrabble, if you get really desperate). 

If you pack enough clothes for three or four days, it should be possible to wash and re-wear them without a problem all holiday. If you’re mad on clothes and like variety this will be a nuisance. But just remember that all those people who go off on gap year trips travel light, and they don’t have a terrible time because they happen to be wearing the same clothes a lot.

For the beach and pool you don’t need much: swimwear, shorts/sarongs, a top or two and light sandals or pumps. Then you need a sightseeing/day-out outfit or two, and a couple of evening things. If you intend to go walking, wear trainers or walking boots during the journey, or the first bit of it at least. Wear your heavier layers for travelling. Tie extra things – jumpers, shirts – around your waist. Put on all the jewellery you’re taking. You may look a bit, well, ridiculous but does that matter? There are no laws against it and you are beating the system. Anyway,  once you’re through security you can stick them in your bag which should be expandable for this very reason.

Furthermore, if the villa or apartment does not provide books, you can buy them – after the security checks. You might have to leave them behind but remember, you’re still saving money.

How much money? If you take a suitcase, you won’t be able to check in on line and, apart from all the nuisance of the check in queue, you will have to pay £6 for your suitcase each way. And then they will clobber you for a £6 each way booking fee. So that free trip will then cost you, actually, £28 –  £56 for two of you, rather than £0.00 with an electron card and a squashable cabin bag each.

Final tip: take your own food. In-flight grub, as I’m sure you all know, is a ridiculous price (though, unfortunately, you can’t take your own drinks but have to buy them after security at the airport or on board).

Della and her team in Bath are reporting buoyant feedback from villa and apartment owners booking space in Holiday Villas magazine and on www.villaseek.com. Bookings are looking good, despite – or perhaps because of – the financial downturn.

Many people seem to be turning their backs on expensive cruises, five star hotels and the like – too expensive in a recession.  But in general they’re not abandoning their main holiday (as a report out today by PricewaterhouseCoopers makes clear). Instead they’re after better value – and flexibility. They are turning to villas and apartment.

Owners say they’re receiving more enquiries and, more importantly, firm bookings. And we’re upbeat, too, because we’ve always said that booking your holiday direct with the owner is the best way to get a fantastic holiday home at a brilliant price. There is no middle man to take a cut and you get to speak to the owners direct, which  means more flexibility with dates and price. Sometimes an owner can fit a booking  around a non weekend arrival – when cheap flights are more plentiful.

Also, increasingly, people are asking about things like washing machines, hair driers, books and toiletries. Well equipped villas and apartments can lead travellers to decide to take hand luggage only – because it’s checking in a suitcase that bumps up the cost of flying. Many owners will do their best to get in  provisions like coffee and tea bags and even shampoo and soap so that their visitors can travel light.

Most of us are more savvy now about how to make sure the cheap flights advertised actually are cheap: no frills flights are at their cheapest – even free – if you check in on line and take only hand luggage. 

We’ll be writing more about how to get the cheapest flights very soon.

*The survey for PricewaterhouseCoopers was carried out by ICM Research. For more information go to www.pwc.com

Hello everyone,

Here’s an item I’ve used in the Update pages of the next issue of Holiday Villas, in the shops at the end of the month, and in the on-line magazine which should appear on Villaseek.com at around the same time: read it and it may just save you a few headaches when you’re travelling abroad!

Credit cons 

Credit card crime committed using British-issued cards abroad shot up by 77 per cent last year. A staggering £207.6 million were stolen, says Apacs, the organisation representing debit and credit card companies.                                                                              

Apacs advises us never to let our cards out of sight, as they could be ’skimmed’ – that’s when a receptionist, or similar, swipes a card twice. The first swipe is to record the actual payment, the second is to record information from the magnetic strip. This latter is all a crook needs to make a counterfeit card. Though a false card will not contain a microchip, making it no good for chip-and-pin purchases, it could be used in places relying on signatures only and on-line, says Apacs. 

Also watch out for: •An extra 0 added  to a payment slip – altering, say, a €50 purchase to €500 •Double-charging – if a vendor says he or she has made a mistake and asks you to sign another slip, make sure you get proof of cancellation of the first payment •Any offers to convert your money into sterling at the time of purchase – not illegal but expensive.                                                            

Fortunately, card companies block payments if their systems suspect fraud. Their computers know, for instance, what you regularly spend and where you spend it, so if there’s a £500 payment made in a foreign country, you will be warned. This is great – unless you’re actually in the foreign country. If this is the case, your card could be blocked when you need it most.                                                                                                                                           

To prevent this happening, especially if you don’t travel a lot, it’s best to let your card company know which country you are visiting and when. Also: take more than one card with you, as then you’ll have a backup.