British travellers are responding to the squeeze on their spending power by reducing the length of their holiday, according to TUI.
TUI chairman Klaus Mangold said British holidaymakers are being hit by a ‘two-fold’ price increase, caused by the fall in the value of the pound and rising prices in holiday destinations.
He warned the operator will have to pass rising costs onto customers following the pound’s collapse.
He said the company has already noticed Brits taking shorter holidays as a result of rising inflation, with vacations cut down by two to three days on average.
Speaking in St Petersburg, Mangold told the Press Association that despite attempts to hold costs steady, pressures on margins will mean prices for British customers are likely to rise.
He said: "We are trying to avoid this, but sometimes we cannot avoid it.
"Italy, Spain, Greece are increasing their prices so they (UK travellers) are suffering two-fold.
"One is by the currency issue and second is the increase of prices in the country of destination.
"So you have to compensate it and I believe that we are making major efforts to do this and to make sure that… we can offer our customers a reasonable pricing as far as destinations are concerned."
He did not say how soon the price increases would come.
TUI posted a 3.3% rise in revenue for the six months to March 31 to €6.38 billion (£5.4 billion), with half-year losses narrowing to €308.6 million (£261 million), an improvement on the €394.9 million in the same period last year.
