Travel companies explain why Michael Gove is totally wrong about holiday pricing

The travel industry has bitten back after Michael Gove referred to holiday companies as “tourism sharks” for increasing prices during school holidays.

The Tory backbencher and former education secretary attacked “unscrupulous tourism firms who try to rack up costs” in his column for The Times this week and called for “better regulation of that market”.

ABTA chief executive Mark Tanzer weighed in on the on-going row about term-time holidays which followed last week’s Supreme Court ruling against Jon Platt. Platt refused to pay a local council fine for removing his child from school during term-time to go on holiday.

In a letter to The Times, Tanzer explains the law of supply and demand to former cabinet minister Gove, along with issues specific to the industry. “The reason that prices are so much higher in the summer months is due to high demand. It is not just British holidaymakers who want to travel at this time but many of our European neighbours also choose to holiday in July and August when good weather is virtually guaranteed.”

Tanzer goes on to say that ABTA members have long supported staggered summer holidays. “This system has worked well in other countries, such as France and Germany, and has helped to alleviate some of the sharp peaks in pricing, expand the travel window and ease the pressure on family budgets.”

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AITO chairman Derek Moore also had some stern words for Gove. "He clearly doesn't understand how the industry works and is taking two and two and getting five," he said.

“It’s easy to put the word ‘rip‑off’ in front of something and make it a story, but consumers need to understand pricing is not that simple. It’s very much misunderstood.”

Many in the industry agree with this perception, particularly small business owners who have been under increased pressure as inflation rises. Alice Watson, who rents out a cottage to holidaymakers in her native Cornwall told The Independent why her prices rise during the summer.

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“At our cottage – which was my grandparents' home – our summer holiday rates are exactly double our low season rates. It's a family business, and when I started working on it, I thought that was wrong – and swiftly realised it wasn't. People don't realise how much it costs to run a cottage. For us, the running costs alone can be well over £500 per week. It's not easy cash – we spend a huge amount of time and effort getting bookings in and keeping guests happy. If we were making £250 a week year round, it simply wouldn't be worth it. What makes it feasible are the summer bookings.”

Watson is keen to stress that her family has frozen prices during peak season for the last three years. “It's important to us that we keep it relatively affordable – we feel strongly that it's such a special place we don't want it to be out of the average person's price range. A few years ago we tried to make things fairer and smooth out prices across the board. Obviously the holidays were booked up almost immediately, because we were cheaper than the competition, but we got hardly any bookings outside of the school holidays – as compared to other properties, we were more expensive out of peak season.

“Being able to rent out the cottage enabled me to move home to Cornwall. It's hard to find work where I'm from outside the holiday business, and I know many people who aren't as lucky as me who want to come home, but can't. If we dropped our ‘shark’-like prices, I would have to leave the place I grew up in and want to stay in.”