Capitalism 101

There is currently an undercurrent of anger running through the internet, over the tendency for holidays to cost significantly more during school breaks; things going round Facebook, news stories on the BBC, government petitions, etc…
I don’t think there’s anyone refuting the fact that costs are higher during the school holidays, as the evidence does pretty much speak for itself – we were recently looking at a Center Parcs break with my parents and there was a four-fold increase in cost between the week we’re going and the week of half term. However, I’m going to make a fairly controversial statement here… I don’t think that the anger aimed at holiday companies is really justified.

Before I go into my reasoning, let me give full disclosure… I have never been really hit by school holiday prices yet; I am a parent, but it will be another few years before this really becomes a problem. However, while I’m sure I will find it annoying when the time comes, I still won’t be knocking on the gates of parliament, demanding they do something about it.

So, here are the three aspects of the whole furore that prevent me from agreeing with calls to regulate the industry.

1) Holiday companies aren’t forcing you to go on holiday.
People complain that they have to pay through the nose to go to their preferred destination during the school holidays. Here’s a suggestion… don’t go there… find somewhere cheaper. Once my son hits school age, we won’t be saying to ourselves, “I can’t believe we’ve spent four times as much as last year”; we’ll be saying, “Well, we can’t afford to go there again… where can we afford?”

2) Holiday companies aren’t charities…
… they’re businesses. This, for those that have forgotten, means that they are out to make money. Take somewhere like Center Parcs, which seems to be one of the big targets in this fight. Center Parcs has a limited amount of accommodation on any given week – if they can charge an absurd amount of money and still fill that accommodation, then they are clearly going to do that… why would they choose not too? More importantly, why should they be obliged not too? Yes, it’s annoying if you can’t go during one of the cheap weeks, but that’s no reason to begrudge them the right to charge what people will pay.

3) Holiday companies don’t actually hike their prices during the school break.
Given the choice, holiday companies would ideally like to charge higher prices every week of the year, as this would make them more money (see the previous point). The fact is that they don’t charge higher prices during the school holidays, they charge lower prices during term time. No one complains that cinemas hike their prices during the evening, because they don’t; they just charge less during the day, when they need to encourage people in. (People might complain about the general high price of cinema tickets, but that’s a whole different argument.)

In conclusion, there is no great evil here; just supply and demand.

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