The aftermath of the corona pandemic and the war in Ukraine is causing a severe shortage of chips in the automotive industry and exploding fuel prices. Two things that will weigh on your travel budget this summer.
1 / Fuel surcharge
Previously, no one paid particular attention to the fact that the price of the booking invoice for a package tour can still fall or rise if there is a fluctuation in the fuel price. But in the meantime, the price increases have become so marked that they are seriously beginning to have an impact on the travel budget.
Early bookers could still cover themselves for free with TUI for a fuel surcharge. But in the meantime, the tour operator is calculating the increase in fuel costs for bookings from the summer catalog.
A surcharge is not yet in effect at other tour operators such as Sunweb and Corendon. Both work with a fixed fuel price that has been checked with the airlines for months – that is, before energy prices peaked – so they do not have to pass on higher costs. But it can not be ruled out that if the pressure on the oil market continues, it will still happen.
‘In the medium term – e.g. winter 2022 and summer 2023 – it will probably have an impact, ‘says Martine Langerak, Sunweb’s spokeswoman. ‘The big question is what impact the geopolitical development has on the price of fuel and what it means for the air fares we have to pay to the airlines.’
How is the supplement calculated?
The price you find for a trip in the catalog takes into account the fuel price at the time the catalog was published. When booking, the current fuel price is then looked at, and the catalog price is adjusted up or down.
The price of a rental car will never fall to the level of the past.
Not every price increase is calculated on a one-to-one basis because we work with slices. At TUI, each tranche of 20 euros carries over 550 euros per. tonnes of fuel for a price increase, and each tranche of 20 euros below 411 euros per. tonnes leads to a fall in prices.
The calculation of the fuel surcharge is based on fuel prices three months before departure. The longer you fly, the more you have to pay, because the surcharge is based on consumption during the flight. ‘For trips to Italy or Spain, 72 euros per person is added, for Greece it is already 96 euros. The highest surcharge is for travel to the Caribbean plus 320 euros, “said Piet Demeyere, spokesman for tour operator TUI Belgium.
The current surcharge rates apply for those traveling in June. ‘Meanwhile, we have already calculated the rates for a departure in July based on the prices in April,’ says Demeyere. ‘They are completely on the same line.’
Is the supplement the same for everyone?
The surcharge that the tour operator charges when paying the balance depends on the time you booked your trip. If you booked a trip to Montenegro in early March before the end of August, you paid a supplement of 18 euros per. If you booked the same trip in early April, 84 euros per person was charged on top of the list price. If the surcharge is 70 euros when the balance invoice is drawn up, you will have to pay an additional 52 euros in the first case and 14 euros less in the second case. In the end, everyone pays the same amount for the same trip.
Can I do something about the price increase?
Travelers who have to pay more than 8 percent of the total cost can cancel their trip for free. “We need to inform travelers about this and we allow them to cancel for free,” says Demeyere. ‘Some travelers have already done so, but often they choose a cheaper hotel or drop a few nights to stay within budget. But all in all, there are virtually no cancellations or changes and more than 95 percent let the journey go on at a new price. ‘
Is it a solution to pay for the whole trip right away?
Paying for the package tour in full immediately upon booking to avoid a surcharge is not an option. ‘With us, the entire invoicing process is fully automated with an advance of 30 percent each time and a later settlement of 70 percent,’ says Demeyere.
He also notes that most people are not inclined to pay the full amount right away. ‘With a package holiday, you can easily spend thousands of euros for a family. Few people want to pay such an amount months in advance. ‘
To pay the balance, always wait until the final amount, including any fuel surcharge, is available 42 days before departure. If you book less than 42 days before departure, the full travel amount is due and the updated fuel prices have already been taken into account in the amount. In any case, you always pay the fuel surcharge.
Can I hedge against the price increase?
At TUI, you can protect yourself against rising fuel prices with a fuel protection program. “Technically, it’s not insurance – because you need a claim – but protection,” says Demeyere.
He notes that in the past, travelers were often not interested in the fuel protection program. “However, when we opened the summer bookings in September 2021, we already took into account higher inflation in general and higher fuel prices in particular. Therefore, we have offered it for free for all bookings until 15 January.”
There are no fuel surcharges for airline tickets booked separately from an overnight event.
The traveler always had the choice not to accept the free offer. If he thought the price of fuel would fall, he could choose not to take the protection. With such protection, you will lock in the price and not enjoy a drop in fuel prices. “But the vast majority felt it made sense. Seven out of ten people have taken that protection ‘, says Demeyere. ‘We note that the same number of people also opted for the protection of reservations after 15 January.’
The amount you have to pay is based on the current fuel prices. For those who booked a trip to Spain until around March, it was 22 euros per person. ‘But the amount is adjusted for the development of the fuel price. In the meantime, it is 70 euros for those who order for September ‘, says Demeyere.
Do I also have to pay a surcharge on airline tickets?
There is no surcharge for airline tickets booked separately from a stay arrangement. The reason is that these tickets are paid in full at the time of booking and that this is considered a contract entered into, for which no further adjustments are made.
2 / Rental cars
Why are rental cars so expensive?
Renting a car during your vacation has become much more expensive because the market for rental cars at some popular vacation destinations has been completely disrupted by the corona pandemic. There have been virtually no trips in the last two years. As a result, the car rental companies were left with a lot of stationary cars. Many landlords have sold off part of their fleet to buy new cars as soon as the tide turns.
Travelers who have to pay more than 8 percent of the total cost can cancel their trip for free.
However, the rental companies will face a particularly difficult car market in the spring, leading to a delay in replenishing the fleet. Fewer cars are leaving the production line because the corona crisis led to chip shortages and the supply of certain car parts from Ukraine has stalled.
How much more do I have to pay?
The shortage causes an imbalance between supply and demand in the car rental market. As a result, rental prices have skyrocketed and in a number of cases have risen by at least three or four times. You will get a big bill, especially for popular destinations in southern Europe. Prices from 700 to 1,000 euros a week for a small family car are no exception.
What can I do about it?
Not much you can do at the high prices. It is best to rent a car as soon as possible to determine the current price. It is virtually impossible for prices to fall this summer.
It is also best to act as soon as possible, because otherwise you can fish behind the net. It is a good idea to book a car right away when booking a trip. If you have a habit of waiting and only renting a car on arrival at your travel destination, it is best to let that habit lie. There is a good chance that no car will be available at the destination.
Are prices falling again?
It depends on the extent to which car manufacturers can meet the demand again. This summer it will no longer be possible. Also, assume that rental prices will fall somewhat in the long run, but no longer to the level of the past.
Rental cars are three to four times more expensive
Renting a car during your holiday has become much more expensive as the market for rental cars to a number of popular holiday destinations has been completely disrupted due to the corona epidemic. Over the past two years, there has been virtually no travel. That meant car rental companies had a lot of cars that just stood still. Many landlords have therefore sold off part of their fleet with the idea of buying new cars as soon as the tide turns.
However, the rental companies will face a particularly difficult car market in the spring, leading to a delay in replenishing the fleet. After all, there are fewer cars currently out of the production line because the corona crisis led to chip shortages, and meanwhile the supply of certain car parts from Ukraine has also stopped.
The shortage causes an imbalance between supply and demand in the car rental market. The consequence of this is that rental prices have skyrocketed and in a number of cases have risen by at least three to four times. You will get a big bill, especially for popular destinations in southern Europe. Prices of 700 to 1,000 euros a week for a small family car are certainly no exception.
You can not do much at these high prices. The best thing you can do is rent a car as soon as possible and lock in the current price. It is virtually impossible for prices to fall this summer.
It is also best to act as soon as possible, because otherwise you can fish behind the net. Booking a car right away when booking a trip is therefore definitely a good idea. If you have a habit of waiting and only renting a car on arrival at the destination, it is best to let that habit lie. There is a good chance that no more cars are available on site.
Will there be any improvements in the future? It will depend on the extent to which car manufacturers can meet the demand again. It will no longer be possible in the coming summer period. Also assume that rental prices will probably fall again in the long run, but then no longer to the level of the past.