Holiday bookings for three-star destinations fall as households struggle

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Holiday bookings for three-star destinations fall as households struggle

Holiday bookings for three-star destinations are starting to fall as households are hit by the cost of living crisis and cuts back due to rising bills, according to the travel company On the Beach.

While premium bookings by customers with deeper pockets were proving resilient holidaymakers who traditionally would book cheaper trips, they had to rein in their spending, according to the online travel retailer.

Booking holidays at a higher price point, such as 600 -- 800 per person and more, are proving more resilient than those that would be booking holidays for 300 -- 500 and less. Simon Cooper, On the Beach's chief executive, said that tends to be the difference between three-star and five-star destinations.

He said that those would be the demographics that would be more squeezed from cost of living pressures, and who might have lower savings. The headline rate of consumer price inflation hit 11.1% in October, its highest since 1981, due to soaring energy and food bills. The rising cost of essentials has weighed down the spending capacity of UK households, some of which have been rowed back on foreign holidays.

Cooper said Turkey was very affordable and offered premium locations and well-equipped hotels for less.

Bookings for Caribbean destinations, such as the Caribbean Sea, had been affected by the drop in the value of the pound and the rise in the US dollar. We've seen very strong sales for long-haul destinations again, perhaps because of the pent-up demand coming out of Covid. It came as On the Beach reported pre-tax gains of 14 m, compared to the 18 m loss in 2021, when travel restrictions were still in place.

Cooper said that planned strikes by workers including Border Force staff were not particularly concerning compared to the disruptions the company faced during the Pandemic. Cooper said we are not seeing any immediate impact from the strike headlines. We have handled a lot of disruption over the last two and a half years and we will continue to do so. On the Beach also announced that Cooper, who founded the firm in 2004, would be stepping down from his chief executive role and would be replaced by the chief financial officer, Shaun Morton, within the next year. The shares of the beach were down 4.6% in the afternoon.