Probe into school holiday price 'rip-off'

Travel company bosses are at the centre of a government inquiry into "unfair and unjustified" prices during the school holidays.

A government minister has summoned executives from Britain's biggest travel operators to a "holiday summit" to explain why prices rise so steeply once term ends.

The moves comes as an Evening Standard survey reveals that parents are charged as much as 170 per cent more if they stick to the school holidays rather than take their children

out of class. It is the first time that the holiday industry has come under such intense government pressure to defend the steep increases. Parent groups believe that they are being ripped off by holiday firms seeking to maximise their profits.

Maggy Mead-King, of the lobby group Working Families, said: "I do think parents are between a rock and a hard place. On the one hand, most do not like taking their children out of school in term time but, unfortunately, once it gets close to holiday time the prices do shoot up.

"In the South-East many parents are very hard pressed already because of the high cost of childcare and property and have not got much to spare. So it seems particularly hard that they are being charged so much when they come to take breaks with their families."

Consumer affairs minister Gerry Sutcliffe wants the heads of Britain's biggest travel operators - such as Thomas Cook, MyTravel and First Choice - to open their books to prove that the high prices can be justified.

The firms have been asked to come up with a full analysis of their pricing for a meeting with the minister before the parliamentary recess in July.

The move comes before the first summer holiday season since the launch of a government clampdown on truancy. Parents face being fined ?100 for

taking their children out of school during term-time.

Detailed analysis of holiday prices shows how parents are often heavily penalised by waiting until the "holiday ghetto" period of late July and August.

For example, a seven-night holiday for two adults and two children at the three-star Hotel Miami on Ibiza would cost ?1,140.30 starting on 7 July, just before state schools break up. The price would more than double to ?2,135 for a departure a month later on 8 August.

The Office of Fair Trading (OFT) has always refused to launch a formal investigation as it believes that the British holiday industry is technically "competitive". However, the intense ministerial interest could force competition officials to take a fresh look at pricing structure. The holiday industry has always stoutly defended the increases, saying they are the result of market forces and the increased prices they are charged for hotel rooms in high summer by local operators.

Keith Betton, a spokesman for the Association of British Travel Agents, said: "If you look at the big travel companies' financial results, you will see that they make a loss or only a tiny profit out of season.

"If they did not charge the higher prices during the peak they would soon be out of business."-However, Liberal Democrat-trade spokesman Malcolm Bruce said: "I don't accept that it is just a matter of supply and demand. The huge premiums charged at the very peak do not in any way reflect the charges incurred by the companies."

He demanded a full-scale OFT investigation "to see to what extent price differences of 50 to 100 per cent are justified".

The Government is looking at a range of measures that it hopes may alleviate the problem. These include a pilot scheme with four local councils, which have teamed up with holiday companies that are prepared to offer discounts in school holiday time as part of a loyalty scheme.