Average family will spend nearly a fifth more than their holiday budget in unanticipated costs

Consumer expert Simon Read shares his holiday budget planning tips

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Holidaymakers have to find an extra £536.80 due to poor planning

New research from ATOL, the holiday protection scheme, has found British families are willing to spend 13% more on their holiday this year compared to last year, with a family of four now set to spend an average of £3,133 on their annual break.

However the research into holiday spending habits also revealed unexpected holiday costs leave travellers in the red on their return.

ATOL’s research revealed that two thirds of holiday makers (61%) struggle with budgeting on holiday. As families relax into their holiday it also seems they relax their purse strings with more than one in ten (12%) admitting they don’t keep track of what they are spending and then get a shock when they come to settle the bill at the end of the trip.

A family of four holidaying abroad should set aside an average of £536.80, to cover unexpected costs, the equivalent of two return flights to the Canary Islands or a four day pass to Disneyland Paris.

Head of ATOL, Andy Cohen, said:

“Holiday costs can mount up quickly, while you’re enjoying your holiday, making it very easy to overspend.

“Our research also showed the unexpected can happen, and over their lifetimes nearly a fifth of consumers (18%) have had to pay for replacement accommodation and a sixth (16 per cent) have had to pay for new flights.”

Top unexpected holiday costs

UK holidaymakers are most likely to get caught out by having to pay for additional food and drink outside of their original booking, and by charges when withdrawing money abroad.

Top 10 unexpected holiday costs:

  1. Food and drink bills
  2. Charges when withdrawing money
  3. Parking charges
  4. Additional car hire costs
  5. Airport transfers and shuttles
  6. Excess baggage
  7. Airplane food and drink
  8. Phone roaming charges
  9. Internet charges
  10. Sporting equipment hire

 

Finance should be as important as choosing the hotel

 

Simon Read, personal finance expert, said:

“Holidays are a great way to relax and switch off, but this can all be ruined if people overspend abroad. While we know budgeting and finances are not a top holiday priority it is important not to lose control completely. Foreign currency, changing exchange rates and excitable family members can all lead to budgeting confusion when you are away.

“However, by taking simple steps such as checking for ATOL protection or setting a daily allowance, people can manage their budgets better while on holiday and avoid those unexpected costs that can dampen the end of a holiday.”

Simon Read’s top tips for keeping your holiday budget on track:

  1.  When comparing flights make sure you take into account ‘hidden’ costs such as baggage or seat selection
  2. Always check what is actually included within a full-board holiday, especially smaller items such as food and drink
  3. When booking make sure that your break is ATOL-protected. Look for the ATOL symbol on travel company websites or brochures and don’t forget to take your certificate with you
  4. Ensure you know your holiday budget before you go and use a foreign currency pre-payment card to know exactly what exchange rate you’ve paid
  5. Make sure you check the airport and resort fees – some resorts charge up to £10 a day which can prove an eye-watering £140 extra per person on a two-week break

Terms and conditions can have hidden costs

The small print can also catch out holidaymakers. Read, while talking on the John Guinn Travel Show, said:

“I do check the terms and conditions to make sure that there aren’t any extra costs.”

What hidden costs should you look out for?

Here are some examples of costs that can be hidden in the booking terms and conditions:

  • Start when you’re booking. The cheaper the flight often the more you’ll have to pay in extras. Want to choose your seat? That’ll be £10. Want to be first on the plane? That could be £20. When comparing the costs of flights make sure you include all the costs, whether they’re hidden or not
  • Is that holiday really all-in? Many people get caught out by not checking what is actually available on a full-board holiday. Is all that wine and beer included? What about snacks in between meals or poolside? Many holidaymakers come a cropper when they’re stung with unexpected food and drink charges because they don’t check. And definitely don’t be tempted to raid the hotel minibar
  • How are you planning to pay for things while you’re away? Use the wrong card and you could get a bad currency conversion rate as well as additional charges, such as foreign transaction fees. If you buy a foreign currency pre-payment card before you go, you know exactly what rate you’ve paid and also how much money you have. Budget beforehand how much you can afford to spend each day and keep to it to avoid landing yourself with rip-off rates from emergency spending on credit
  • Airport and resort fees. Is there an extra charge for transfer from the hotel to the airport? It could be £20 or more so check the extras when you’re booking to see the total cost of getting to your resort. And also check if there are resort fees. Some charge up to £10 a day which can prove a mouth-watering £140 extra per person on a two-week break.
Simon Read, Personal Finance expert (left) and Tony Finnegan, ATOL

The worst unexpected cost to pay for

Food and drink are not the only unexpected costs that holidaymakers may face. Nearly a fifth of UK holiday makers (18%) have at some point had to pay for replacement accommodation, and a sixth (16%) have had to pay for new flights. Cohen said:

“It’s essential consumers look past the price of their trip when booking and check for ATOL protection. This will protect the money they have spent on flights and hotels, and ensure they don’t end up paying more in the end should their travel company collapse.”

The ATOL scheme covers the traditional package holiday, and some individual flights and holidays known by the industry as ‘Flight-Plus’.

A ‘Flight-Plus’ booking is one that includes a flight plus accommodation and/or car hire, so long as these separate parts of the holiday are requested within a day of each other.

How does ATOL work?

While speaking on the John Guinn Travel Show, ATOL spokesperson, Tony Finnegan explained how ATOL protects UK holidaymakers when flying abroad.

“If you book an ATOL protected holiday you are covered if your travel company or any of its suppliers collapse.

“You won’t lose your money and you won’t be left stranded abroad.”

When the holiday (it must have a flight leaving the UK) is booked the travel company must send the holidaymaker an ATOL certificate. Unfortunately, some companies falsely advertise that their holidays at ATOL protected. Travellers should check that the company is legitimate by using the CAA website.

“You can check the name of the company to check that even if they are displaying the ATOL logo it is a legitimate use of it.

“Look for the ATOL section [of the website]. You can type in the name of the company and it will tell you if they are a legitimate ATOL company.”

Careful esearch is important to Read when planning his own family holidays.

“I don’t want to come home from holiday and have a huge credit card bill that means that I’m still paying for my break months later.”