Will prices rise during the holiday season?

An evaluation has shown that prices for travellers are rising. The consumer protection bodies provide advice for a successful holiday season.

This year’s summer holidays come at a time of transition: the pandemic is coming to an end, but it is still here. In the midst of this turning point, many things remain far from the normality that travellers knew before the Corona pandemic. There are warnings about chaos at the airports, with long queues threatened. Following the unprecedented job cuts in the catering industry over recent months, there is now a shortage of employees to cope with the sudden rush. And prices are suddenly rising at the same time, faster than they’ve been for 10 years in the USA. The headlines on the financial press say it will be a "summer of inflation".

And things will become much more expensive for Swiss travellers. This is shown by an evaluation of holiday-relevant budget items from the State Index for Consumer Prices (Landesindex für Konsumentenpreise), which is published by the Federal Office for Statistics. Anyone who has to buy fuel to go on holiday by car will pay almost 20% more than a year ago, and cinemas, theatres or concerts have become a bit more expensive. The same applies to eating and drinking in cafes or restaurants. There has a much larger price increase in the hotel industry.

Price increases that have not been seen in decades
Overnight stays cost an nationwide average of 8% more than a year ago. You have to go back a long way to find comparable price increases in the statistics: to the beginnings of the ‘90s, when Switzerland had twice as many German guests. And when some foreign guests used to deposit fresh earned ‘black money‘ at the Paradeplatz in Zurich before spending an expensive weekend in Graubünden. The current prices are actually still lower than they were ten years ago.

Holiday countries such as Spain or Greece could change the quarantine rules for guests. Holidays thereby need to be prepared carefully. Pictured: Beach in Athens.
EPA

The increase in hotel prices has not been welcomed by the Foundation for Consumer Protection (Stiftung für Konsumentenschutz). Managing Director Sara Stalder says that, during the corona summer, many guests realised that there are good offers within Switzerland, and overnight stays were a bit cheaper at that time. But these good memories could be destroyed if the industry prematurely raises prices again sharply.

Guests will otherwise flee abroad again
This would reinforce the image that prevailed even before the corona crisis: the image of the overpriced holiday destination of Switzerland. Sara Stalder therefore appeals to the hoteliers to think carefully about price increases. Otherwise the result will once be that:

"Holiday guests from Switzerland will flee abroad again as soon as this becomes possible."

The starting position is different for fuels, both petrol and diesel. The current figures for this important cost item should not only be compared with those from the corona year 2020, however, because the price of oil was more or less crazy at that time, and collapsed when traffic was shut down in the world's first lockdown. The prices have shot up again from the arrival of the first vaccines.

The ups and downs in 2020 explain the extreme statistical figures in 2021. A price increase of 20% compared to the previous year is only being reported today because the oil price in the previous year was abysmal. The rise in prices does not reflect a resurrection of the inflationary scares that were believed to be dead, but merely the return to economic normality. In the world of the end customers, it’s clear that petrol and diesel actually cost slightly less than two years earlier. The story is similar in the case of package holidays: although they are slightly more expensive than last year, they are far cheaper than in the world before Corona. The mountain railways are also slightly cheaper than two years ago, while airline tickets are still a bargain at the moment. Overall, the price increases still remain moderate if you compare them with the pre-corona period.

Penny-pinching can turn put to be very expensive
But you shouldn’t look too rigidly at the prices. Penny-pinching can turn can be expensive, according to the Consumer Protection. Managing Director Stalder points out that holidays make up one of the largest items in the budget, and consume several thousand francs. Fair conditions are therefore more important than prices: whether you can get your money back, for example, and not just a voucher that you can't use – or even lose your money completely. This general recommendation will be particularly important in the summer of 2021, says Sara Stalder. Hopefully it won't be another time full of cancellations.

"But it could be another unpredictable summer."

Because a lot could happen in the summer of 2021, Holiday countries such as Spain or Greece could change the quarantine rules for guests, and Switzerland could change the rules for people returning from holiday. A hotel could start requiring expensive self-tests, and the trip would suddenly be CHF 200 more expensive per person. A big question arises in this mixed situation: should you book everything yourself, or would you be better advised to rely on a travel agency?

Overrun by requests for help
The travel agencies sense their opportunity here. Walter Kunz of the Swiss Travel Association says they have a good overview of all the regulations and can provide advice and then cancel and book somewhere else. This was not possible last summer because everything closed down all over the world, he says, "but we can fully exploit our strengths this summer."

Sara Stalder agrees with this. With regard to consumer protection, it’s advantageous to book holiday arrangements with a travel agency in the current situation, as your booking is then protected by the Package Travel Act (Pauschalreisegesetz). Sara Stalder adds that the travel agencies could actually have played to their strengths last summer, but didn’t do so. On the other hand, the Consumer Protection service has been virtually flooded by the requests of their customers seeking help. "The industry was tested, and the majority faoled miserably. They’re now getting a second chance."