Supply and Demand - basic economics or is it all just Mickey Mouse?

When I was growing up, I always got over excited as the summer holidays approached. Not just because six weeks of fun and long days in the sun lay ahead but because I was lucky enough that my parents took my brother and I abroad every July to somewhere new, exotic and exciting.

1976, holiday number 1 was Tunisia where mum forbid us from eating any fruit unless it came from a tin, a waiter used to walk around the hotel complex peddling his wares and shouting "Asda price" at the top of his voice and some local at the market in Monastir offered to swap my very blond brother Nial for a rather handsome looking camel. Greece was the destination in 1977 where I had my first official holiday crush on the waiter. Portugal's Algarve coast, Menorca and then a gite in France with my extended family followed. We were very fortunate to get all these holidays and Nial and I were grateful that mum and dad had upgraded our holidays from Newquay and Troon to sandier beaches and warmer climates. It was the late 1970s and back then the average price of a package holiday was a fraction of today's luxury getaways.

But, hang on, if my parents had taken us out of school before the end of term we could have got the holiday cheaper, couldn't we? Well no we couldn’t. My mum was a teacher.

And as a teacher she had a real bee in her bonnet when parents took their kids out of school before the end of term. Even if the last week of the term was all sports day and fun there were still implications for the teacher who had to prepare homework, lesson plans in advance, extra reading or writing for that lucky pupil who was off for two weeks in Benidorm.

Fast forward to 2018 and has much changed? Well, apparently not. Every year I see friends and families complain about the hike in holiday costs. I regularly see parents take to social media to air their grievances that it is totally unfair that prices increase so much during the peak holiday seasons. But is it really that unfair?

These holidays are a huge expense to the family, so if you can save a grand by leaving in the last week of term is it really much of a burden on the school?

Well let's look at it from all sides:

I asked a few parents and teachers for their take on this and their answers were very clear.

One parent I spoke with, originally from Brazil, said it was more important to take her child out of school to go home and visit her family in South America where she would learn far more about her culture and language than she would ever learn in that lead up to Christmas. Quoting the teacher who said they would only be doing all things Nativity related. However, apparently this same school reprimanded two sets of parents for taking their children out of school at the same time. Confused? I am.

On the other side, a teacher I spoke with was very sympathetic to families who wanted to take their children away.

This teacher did add that there was never a good time to take a child out of school. Logistics for staff were always a nightmare and realistically the child rarely caught up. When parents asked for work to take away it rarely compared with what happened in the class room as so much learning was done through conversation which was reactionary to the time and students involved. They also touched on students spending their holidays worried about the work they were missing out on and falling behind.

So who is to blame here? the school, the parents, or is it the tour operators who inflate their prices in peak holiday season?

Fellow business owner Linda Hill who runs LAH travel in Ayr, gave some interesting insight to this ongoing and heated debate.

"So I like to use the Christmas trees and decorations as an example" Linda told me "You can buy these in January and get them half price but if you want to buy a tree in December you need to pay full price. Incidentally nobody moans at that but it is the same thing"

Linda doesn't set the prices and they don't charge any extra for their service. Commissions come directly from the tour operator. They set the costs. To add seasonality, the tour operators increase costs at certain times of the year.

Any business owner, myself and Linda included would charge more for a product or service based on demand. That is exactly what the tour operators are doing. The big issue is that holidays are so expensive.

So it seems that in the past forty years nothing has really changed. Teachers still have to work harder to meet government targets and accommodate families who take their children out of school during term time, parents are still doing it regardless (strong letters home aren't dealing with this and the charges some schools in England make are far less than the cost saving made) and the tour operators are still applying basic economic principles to their business model.

At the end of the day parents are trying to save money and the tour operators are trying to make it. Who knows, maybe one day the two sides can sit down and come up with a solution to suit everyone?

Until then, I'll just reminisce the good old days of the late 70's when I was allowed to visit the pilot on the flight deck without door codes and security clearance, I had my first summer romance in the Algarve with a "Danny from Fame" look a like and spent many a happy day at the Big T Club in Tunisia building sandcastles.

#economics #supply #demand #schoolholidays #entrepreneur #womeninbusiness #summer #sun