TUI Travel: Price of summer holidays to rise as fuel and accommodation costs soar

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Britain's biggest holiday firm warned today that the price of a summer holiday will rise next year as it bears the brunt of higher fuel and accommodation costs.

Thomson and First Choice owner TUI Travel said it will pass a five per cent increase in the cost of providing a package holiday on to customers.

The news signals more pain for consumers who are already going abroad less as a result of the weaker pound and the squeeze in disposable incomes.

Squeeze: Holidaymakers are already travelling abroad less thanks to a weakened economy

Average selling prices for next summer are up 10 per cent, although this is partly because it has sold more specialisedholidays, which tend to be more expensive.

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TUI also shed more light on the decline in the UK holiday market, saying that bookings for next summer are down 11 per cent.