The Rise of Package Holidays Post-COVID: Why Prices Are Increasing

Package holidays have long been a favorite among travelers for their convenience and affordability. However, since the COVID-19 pandemic, their popularity has surged, leading to a noticeable increase in prices.According to research conducted by Which?, a British consumer watchdog, the cost of package holidays in popular European destinations has risen significantly, outpacing the UK’s overall inflation rate of 2.5%.This trend is attributed to a combination of factors, including higher demand, rising energy costs for hotels, and increased aviation fuel prices. Travelers planning their next getaway may need to budget more than before, especially for destinations like Italy, Portugal, and Croatia, where price hikes have been particularly steep.

Rising Costs: Understanding the Factors Behind the Price Hikes

The price increases in package holidays are largely driven by a surge in demand. As travel restrictions eased post-pandemic, more people sought to reignite their passion for exploration, leading to a competitive market for bookings. This higher demand, coupled with rising operational costs for hotels and airlines, has pushed prices upward. Energy costs, in particular, have had a significant impact on hotels, which are now passing these expenses on to consumers. Additionally, the cost of aviation fuel has risen, further contributing to the overall increase in travel expenses.

Which? analyzed the prices of over 8,000 European package holidays, comparing data from January 2024 to January 2025. The results revealed that seven out of ten destinations experienced price increases that exceeded the UK’s inflation rate of 2.5%. On average, package holiday prices rose by 4.2% year on year, with some destinations seeing even more dramatic hikes. For instance, Bulgaria’s Black Sea coast, once touted as an affordable alternative to Mediterranean hotspots, saw prices surge by 11.5%. The average cost per person for a week-long holiday in Bulgaria climbed from £1,038 in 2024 to £1,157 in 2025, reflecting the broader trend of rising travel costs.

Popular Destinations See Steep Price Increases

While Bulgaria has experienced the most significant price jump, other popular destinations have also seen their package holiday costs rise. Italy, for instance, has become more expensive, with prices increasing by 7.4%. The average cost per person for a week-long holiday in Italy now stands at £1,249, up from £1,163 in 2024. Portugal has also seen a 6.8% rise in prices, with the per-person cost of a package holiday jumping from £1,267 to £1,353. Similarly, Cyprus has experienced a 6.4% increase, with holiday costs rising from £1,241 to £1,321 per person.

Croatia, Spain, and Greece, while still popular, have seen more modest price increases, averaging just under 3%, closely aligned with the UK’s inflation rate. These destinations remain relatively affordable compared to others, offering travelers a chance to enjoy their holidays without breaking the bank. However, even in these countries, prices are inching upward, reflecting the broader economic pressures affecting the travel industry.

Where Travelers Can Still Find Bargains

Amid the rising costs, there are still some destinations where travelers can snag a deal. Ibiza, for example, has seen a 6.4% drop in package holiday prices, making it a more affordable option for those seeking a Mediterranean getaway. The average cost per person fell from £1,269 in 2024 to £1,187 in 2025, offering a welcome respite for budget-conscious travelers. Other Spanish destinations, such as Costa Dorada, have also seen price reductions, with average costs decreasing by 2.9%. Tenerife, another Spanish hotspot, has experienced a 2% drop in prices, further highlighting the Canary Islands as a cost-effective choice.

Tips for Saving Money on Your Next Package Holiday

While prices are rising in many destinations, there are ways for travelers to save money on their next package holiday. According to Rory Boland, editor of Which? Travel, booking early is one of the most effective strategies for securing the best rates. With demand high and prices rising, locking in a deal well in advance can help travelers avoid higher costs later. Additionally, shopping around and comparing prices across different travel agents and websites can uncover hidden deals.

Travelers with families may also benefit from considering off-peak times within the peak season. For example, Which? research has found that traveling during the last week of the summer holidays can often be the cheapest option, offering significant savings for those willing to be flexible with their plans. By adopting these strategies, travelers can continue to enjoy their holidays without overspending, even as prices trend upward.

The Future of Package Holidays: Balancing Cost and Convenience

The post-pandemic surge in package holiday demand has undeniably driven up costs, but their convenience and affordability continue to make them a popular choice for many travelers. As the travel industry adapts to new economic realities, destinations that once offered bargain prices are now seeing their costs creep up. However, there are still opportunities for travelers to find value, particularly if they are willing to explore alternative locations or adjust their travel dates.

For those planning their next getaway, understanding the factors driving price increases and adopting savvy booking strategies can help mitigate the impact of higher costs. While package holiday prices may continue to rise in the short term, their enduring appeal suggests that they will remain a staple of the travel market for years to come. As always, staying informed, comparing options, and booking early will be key for travelers seeking to balance their budgets with their desire for adventure.