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Higher Holiday Costs and European Travel Insurance
Travel & Tourism
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Whatever your political views were through the referendum, there?s a fair chance that you will have seen arguments associated with European holiday costs post the Brexit vote (the ultimate result). This has been associated with discussions about European travel cover.
Here?s an instant, professional and hopefully objective summary.

European Holiday Costs Post Brexit

The first thing to note is that the world didn?t end the moment the vote was announced. The vacation and travel companies remain here plus they?re VERY keen to make you part with your money.

Nothing short of a global catastrophe will change that ? so deals will still be out there to be had.

However, it?s probably fair to say that most experts predict that European holiday costs will probably go up due to this fact. Nobody can be sure when, but it may be sooner than we think as well as perhaps continue over 1-3 years.

The Reasons

For a while:

? check here with Sterling against the US Dollar. Most of the cost of one's holiday (e.g. aviation fuel) is calculated based upon holiday companies spending money on things in US Dollars. The currency markets are worried and they?ve pushed the worthiness of Sterling way down against the USD. Which means higher prices.

? A weaker Pound against the Euro. The consequences here may be less significant, because the Euro is seen by the markets as a weaker currency. Even so, modest declines in Sterling?s value against the Euro will push up your holiday costs and decrease the spending power in your pocket once abroad.

? Opportunism. Yes, it?s not unknown for holiday companies to try and justify cost increases during times of political change (the Trojan Horse Syndrome), although commercial competitive pressures of the market should keep control of this.

? Company valuations. A slightly trickier one, nonetheless it relates to the valuations of companies declining because the share markets have retreated because of nerves on the vote. Holiday companies and all related industries will undoubtedly be keen to offset that by producing some investor confidence-building results and price increases seem an attractive way of doing so.

The Medium to LONG RUN:

? It seems far from clear what will eventually the EHIC reciprocal health cover agreements. If the system winds down, then families should search for comprehensive European travel insurance which includes health-cover.

? If the markets? nerves with Sterling start to move investors away from the pound and into the Euro and also the US Dollar, then prices will inevitably rise.

? A BIG element in the NO vote was a promise to radically reduce immigration. If that promise is honoured, the EU is likely to respond and that may re-introduce entry controls in EU destination countries. Which will cause not merely delays but also more work for the immigration and border control authorities, which will generate costs ? which will be passed onto the vacation companies.

Summary

It?s definitely not inevitable that prices will rise substantially or quickly ? but it does seem to be an extremely real possibility.

For the cost-conscious family traveller, shopping around will probably become ever-more important, including for that more comprehensive European travel insurance if the EHIC system be wound down.

Patrick Chong may be the Managing Director of InsureMore, an award-winning team of specialists in worldwide and European travel insurance policies. Besides offering money saving deals on travel insurance, Patrick also collects and shares the very best free travel competitions to help his clients get the most out of these holidays.

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