Foreign travel bookings up

In the last month, Europe’s two largest travel firms both announced that summer holiday bookings are up against last year.

Europe’s biggest travel firm, TUI Travel said despite cutting back the number of holidays it offered, sales in the UK were up 9% compared with the same stage last year, boosted by trips to more exotic, far-off destinations.

Thomas Cook also said summer holiday bookings continued to defy fears of a slowdown in consumer spending.

Both firms are now entering the key summer period, and with only a couple of months to the peak July and September months, they must hold their nerve for as long as possible before slashing prices to entice last-minute travellers.

Paying for your summer holiday

When it comes to paying for your time in the sun, there are two options, cash or credit.

According to Standard Life’s saving and investment index, some 47% of those saving are planning to spend the cash to pay for a holiday.

However, many others borrow to meet the cost. Around 2.3 million holidaymakers take more than a year to pay off debts run up during their summer break, according to price comparison site MoneyExpert.com.

On average, people borrowing to pay for their summer holiday take 3.8 months to clear the debt.

"With so many of us struggling to balance the books at the moment there will be millions of holidaymakers who will turn to credit to make sure they can top up the tan," says Sean Gardner, chief executive of MoneyExpert.com.

"If you can’t save up and have to resort to borrowing for your holiday then it is critical that you get good value."

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