Tourism, 10.07.2024

Will these summer holidays turn into a price hell?

The summer holidays are almost here. They entice with sun, sea, mountains, good food - and lots of relaxation. But they are also likely to be significantly more expensive this year.

The main reason for this is the massive increase in prices in recent years, which is now making itself felt in popular vacation destinations, for example, in France, Spain and Italy. This is making everything more expensive - the trip, the hotel and local expenses. The price surge is being exacerbated by the continuing high demand for vacations after coronavirus. Including in Switzerland.

What is the average holiday budget of Swiss households?
According to a recent survey by Generali subsidiary Europ Assistance, Swiss households have the largest budget available in Europe for summer vacations, at around CHF 4,000, for transportation, accommodation, meals and local activities (according to CH Media). Within Europe, the average is just under CHF 2,400.

Despite higher health insurance premiums, more expensive rental housing prices and, in many cases, the lack of inflation adjustment payments, the reported Swiss budget is as much as CHF 600 higher than the previous year's figure.

It is possible, however, that the higher budget stated has to do with the expected cost increases for the trip itself and the expenses during the vacation. Around half of those surveyed also stated that they wanted to spend less locally in order to compensate for other price increases.

Will flights to holiday areas become more expensive again?
No, at least not compared to the previous year. The feeling of embarrassment associated with flying has now passed, and demand for air travel is high. But supply has also increased - and that is putting pressure on prices. According to an analysis by the Kayak travel search engine, prices for flights from Swiss airports departing between the beginning of May up to the end of September are in most cases lower than last year. In economy class, the average price for a return flight this summer is CHF 549, which is 2% less than in 2023.

The former Swiss CEO Dieter Vranckx believes that flight ticket prices will "fall even further" this year, as he stated in an interview with the "Handelszeitung" newspaper. He also cited the high level of supply as the reason. But he also added: "In the long term, however, air fares will rise, due to increased costs and investments in sustainability."

And air fares have already risen by around 25% compared to the summer of 2019, the last year before the outbreak of the coronavirus crisis, according to the National Consumer Price Index.

Snapshot with the Leaning Tower of Pisa: Italy is one of the destinations that has become massively more expensive                            Photo: grisslee
The cost of hotel accommodation in Antalya has increased significantly    
Photo: Facebook
Diners in Italy are likely to stop smiling when they see the bill: Restaurant visits have become 18 % more expensive                      Photo: Getty Images

By how much have train journeys increased?
Public transport prices in Switzerland rose by 3.7% as of December 2023. But the Swiss Federal Railways (SBB: Schweizerische Bundesbahnen) were not alone in this: the Deutsche Bahn (German Federal Railway) has also increased prices considerably, for example by around 5% for flex-price tickets. The Bahncard 50 and Bahncard 25 - season tickets that offer a discount of 50% and 25% respectively on German railways, and which are similar to the Swiss Half-Fare travelcard - have also become 4.9% more expensive. The prices for Supersaver Tickets have remained the same.

The German Railways (Deutsche Bahn) have also raised the prices for seat reservations by between 6 to 10% as of June 2024. The surcharges are small in absolute terms: individuals will pay 30 to 60 cents more, while whole families will pay 60 cents to 1.20 euros more. Between 1 June and 1 September, however, reservations are now mandatory for international long-distance trains. Nevertheless, anyone traveling by train to a European Championship match will benefit from special offers.

In France, ticket prices for the TGV 2024 have risen by an average of 2.6%. And anyone travelling to Paris will have to pay more in some cases, due to the Olympic Games taking place there. Journeys onthe Paris Metro, for example, will cost almost twice as much between 20 July and 8 September. A single journey will cost a hefty 4 euro - instead of the regular price of 2.10 euro.

Italy's Trenitalia has not implemented a general price increase for 2024. However, train tickets have become 3 to 6% more expensive in various regions, such as Tuscany, Piedmont, Liguria and Sicily.

In Austria, night trains have become massively more expensive in some cases - much to the annoyance of many customers - due to newly introduced dynamic prices. In addition, the ÖBB (Austrian Federal Railway) already increased its prices by an average of 5.8% last summer.

Will hotels be more expensive?
Yes, at least in many places, as an internal analysis by Hotelplan shows (according to a report on CH Media). Turkish destinations, such as Antalya in particular, have become more expensive due to the high inflation there.

The Canary Islands, which include Tenerife, and Majorca have also become more expensive. "Not everyone can afford that anymore," says Hotelplan Suisse boss Nicole Pfammatter. The average price per person for holidays in Antalya, for example, is almost 30% higher than in 2019, and around 8% higher than the previous year.

In Italy, the most popular holiday destination for the Swiss, hotels have even become around 40% more expensive compared to the pre-corona period, as a look at the figures from Istat, the Italian statistical office, shows.

However: "Some hoteliers are getting nervous now," said Nicole Pfammatter. Hotelplan is receiving special offers from these destinations with lower prices on a daily basis. "They are now trying to increase their occupancy rates in the short term,"she added. She therefore anticipates strong last-minute business.

Are local costs also rising?
Yes, and significantly so. The Istat figures for Italy give an impression of the cost explosion that awaits local tourists abroad: compared to 2019, the last summer holidays before coronavirus, the general price level in June 2024 is 17% higher. Tourists from Switzerland must therefore be prepared for the fact that more or less everything will become more expensive - at least in absolute terms. In real terms, the price shock will be somewhat cushioned thanks to the current strength of the Swiss Franc.

But the difference remains large in euro terms. At the top of the list is food, which, on average, costs 25% more than before. Pasta is 30% more expensive, and this has also hit Italians particularly hard. The situation is slightly less severe for pizzas, which are up by 20%, and coffee, which is up by 14%.

All in all, tourists in Italy will have to spend around 18 % more in restaurants and cafés than in the last summer before coronavirus. The biggest price hike in the inflation statistics was for olive oil, which is an important ingredient in Italian cuisine, and for which you now have to pay 90% more.

The USA: it’s not only the products that have become more expensive there, but also the service charge. It was long customary to pay a tip of around 15% in restaurants. In many places, however, customers now receive a bill with three higher suggestions: 18, 20 and even 22%. This makes eating hamburgers, milkshakes and French fries significantly more expensive - in addition to the inflation-induced increase in fixed prices.

According to Michael Bötschi, founder and co-owner of North America specialist Go 2 Travel, there are regional differences in prices: "On the West Coast, in Florida and Hawaii in particular, the cost of hotels and meals is very high and, in some cases, even higher than the price level in Switzerland," he told the industry portal "Travelnews".

The situation is different in the Midwest, around the Great Lakes on the border with Canada, and in the southern states - but only outside the big cities. Prices there are much lower than in the hotspots, says Michael Bötschi: "The choice of destination within the USA will therefore has a major influence on the price-performance ratio locally."

Now that everything is more expensive, will everything work better? Or will there a threat of flight chaos again in summer?
The Swiss airline is optimistic in the run-up to the summer holidays. According to Head of Operations Oliver Buchhofer, the Lufthansa subsidiary has launched around 80 measures to improve the punctuality of its flights. But there are a lot of people travelling: Switzerland's largest airport, Zurich, is alone expecting more than 100,000 passengers per day on the upcoming weekends until the end of August. On peak days, it could even be more than 110,000 people.

And there are still some uncertainties. Zurich Airport, for example, has only recently put a new baggage sorting system into operation. According to Oliver Buchhofer, it is still struggling with a few teething problems, particularly when loading transfer baggage. "There are problems there." According to the airport, around 30,000 pieces of baggage are transported from check-in to the aircraft every day, and up to 50,000 at peak times.

The air traffic control situation also appears to be volatile. Although there have been fewer strikes by European air traffic controllers this year than last year, other aspects are causing uncertainty. The weather has caused some restrictions so far, as have staff shortages and a lack of efficiency in the system.

Skyguide, the Swiss air navigation service provider, recently made negative headlines. Last week, the airspace over Geneva had to be closed after heavy rainfall caused flooding in the control room. This resulted in flight delays and cancellations. This was compounded by software problems in Zurich, which led to restrictions on take-offs and landings.

"At the height of summer, it is even more difficult for us to find an equivalent replacement for our guests when flights are cancelled, because all the flights are extremely busy," says Oliver Buchhofer.

Meanwhile, the new baggage scanners at Zurich Airport promise an improvement from a passenger perspective. These machines, which have been tested from this week on, allow electronic devices such as laptops and tablets, as well as liquids, to be left in suitcases or rucksacks. This should significantly speed up the security check.,

Meanwhile, the geopolitical situation, which could lead to sudden flight changes, continues to remain uncertain. The closure of Russian airspace is forcing airlines to take more expensive detours for flights to Asia, for example. "We sometimes even fly over the pole to Tokyo," says Oliver Buchhofer. And the ongoing conflict in Gaza and around Israel also means some diversions for the airlines. This lengthens the journey times for passengers, and makes the routes less lucrative for the airlines due to the higher paraffin consumption and longer crew working hours. In addition, the connecting flight cannot always be guaranteed as a result.