Why do UK family holidays cost a fortune and how do tax and school rules rig the price?
Each summer, UK holiday prices come under fire. Families feel squeezed, operators are accused of profiteering, and the narrative hardens: it’s cheaper to go abroad than holiday at home.
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But this isn’t driven by greed. It’s driven by policy and tax conspiring in plain sight.
Start with VAT. UK holiday accommodation is charged at 20% VAT. In much of Europe, equivalent family accommodation is zero-rated or heavily reduced. Before demand even enters the equation, UK holidays are carrying a structural cost disadvantage that overseas competitors simply don’t face.
Then comes the second hit: rigid term-time attendance rules.
UK parents are effectively funnelled into a handful of school holiday weeks, unable to travel outside peak season without the threat of fines. Millions of families compete for the same limited supply at the same time. Demand spikes sharply - and prices follow. That isn’t market failure. It’s market distortion.
Contrast this with Europe. Countries such as France, Spain and Italy allow short, agreed absences with discretion and trust. Families travel in May, June and September. Demand is spread. Occupancy is steadier. Prices remain flatter. As a result, European holidays often look better value - even before the sun gets involved.
The UK, meanwhile, stacks high VAT on top of artificially concentrated demand, then acts surprised when August prices look eye-watering.
The outcome is predictable and unfair. UK holidays appear poor value at peak. Families feel penalised. Lower-income households are priced out altogether. And operators are left defending prices shaped largely by government choices.
This is not an argument against education. It’s an argument for modernisation.
When tax policy and school attendance rules combine to distort prices, they don’t just hurt businesses, and they undermine the very families the system is meant to support.
UK holidays aren’t broken.
But policy and tax currently work together to make them look expensive and leave families feeling like they’re being taken for a ride.
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Carl Castledine is the founder and CEO of Away Resorts
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