A new study found that companies in the travel and tourism industry are considering adding surcharges to customers to make up for the rising energy prices.
According to GlobalData’s third-quarter 2021 Global Consumer Survey, lodging, transportation and tourist attractions have been impacted by the rising costs of fuel and many are weighing the options of passing the additional costs on to consumers or absorbing them.
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“As energy and fuel prices have soared, transportation companies such as airlines and rail companies are facing higher overhead costs in 2022 than in previous years,” GlobalData analyst Craig Bradley said. “Companies that choose to absorb these charges could struggle to turn a reasonable profit, forcing many to pass these charges on to travelers.”
Traveler confidence is returning as coronavirus-related restrictions are lifted, but low-cost tourism options remain in high demand due to the economic hardship associated with the pandemic.
As a result, the data found 58 percent of respondents said cost was the most influential factor when purchasing a vacation. The problem for travel companies is that rising operational costs may force brands to add surcharges to existing reservations.
“Lodging, and other hospitality services face a similar dilemma,” Bradley continued. “Energy and fuel costs impact entire supply chains, so the cost of imported goods such as food and beverage will increase.”
Travel agencies and tour operators also fear customers could cancel itineraries due to lack of affordability or service dissatisfaction, based on whether the companies pass the charge on to paying customers or not.
Earlier this week, Longwoods most recent survey of U.S. travelers found that many Americans are concerned about high gas prices, with more than 90 percent having trips planned in the next six months.