Fuel charges put 10% on the cost of holidays

Holidays booked today are costing Britons 10% more than they were a year ago, a leading travel operator admits.

TUI Travel, the European giant best known in the UK for its First Choice and Thomson brands, has been able to shove up prices after slashing the number of holidays it has an offer.

But the higher prices aren't feeding through to bigger profits, which will stay in line with City forecasts.

Holiday groups and airlines such as easyJet say they have been forced to ramp up fees in order to stay profitable in the face of recovering oil prices.

Chief executive Peter Long has argued for some time that TUI would prove near-immune from the recession, claiming that the annual summer holiday is now regarded as an essential by most Brits.

But with unemployment on the rise there are growing signs that this may not be so. In the last eight weeks, bookings in the UK are down 11% on a year ago.

Those of an adventurous bent are still flying long haul, to Jamaica, Egypt, the Dominican Republic - but not swine flu-ridden Mexico.

When the first outbreak of swine flu emerged, TUI offered immediately to fly home its 2,500 customers who were in Mexico at the time.

Only 10% of UK holidaymakers took up this offer, the rest preferring to take their chances and enjoy the sun.