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Travellers turn to travel agent-booked trips for protection as wars and wildfires threaten to ruin summer vacations

Demand for package holidays has staged an unexpected comeback as the spectre of wars, wildfires and worker strikes prompts holidaymakers to seek out greater protection.

Barclays spending data shows that spending at UK travel agents, which has been growing consistently since 2021, outpaced overall travel spend in 13 of the past 17 months.

In May, booking volumes through travel agents were up by 11 per cent year on year compared with 3.5 per cent growth in flight bookings, according to Barclays.

Travel agents including Tui, Jet2 and On the Beach are enjoying a renaissance as holidaymakers look to protect themselves against the risk their trip falls victim to flight delays and cancellations, which are increasing in regularity due to strikes, wildfires and wars.

Britons’ spending on package holidays is growing faster than overall travel spending in a buoyant post-pandemic market. In total, the UK, Irish and German package holiday market is expected to grow 8 per cent annually from £49bn in 2024 to £67bn in 2028, according to consultancy OC&C.

“Demand for package holidays is greater than it’s ever been,” said Shaun Morton, chief executive of UK-listed On the Beach, adding that consumers are “more aware now that if you’ve got [your holiday] as a package, you have more rights”.

Package holidays, which first gained popularity in the 1960s, were Brits’ default way of booking vacations until the internet enabled holidaymakers to research and book their own trips. The changes led to the collapse of Thomas Cook, the UK’s oldest travel agent, in 2019.

“Ten to fifteen years ago it seemed that [package holiday providers] were going to disappear,” said one adviser to leisure companies. “But that hasn’t happened. It has been really, really surprising”.

Demand for package holidays is growing as conflicts in the Middle East disrupt flights and air traffic control strikes in France caused widespread delays in July.

Meanwhile, the rising prevalence of wildfires is increasing risks for holidaymakers in southern Europe especially. Heatwaves have resulted in areas of Greece and Turkey being evacuated this summer.

“There’s always something happening, like events in the Middle East or there’s an earthquake in Turkey or there is a fire in Rhodes,” said Donat Rétif, chief executive of loveholidays. “[But] at the flick of a switch, we can send you somewhere else if you want to.”

Package holidays are covered under the EU Package Travel Directive (PTD) regulations, which protect consumers should their travel provider become insolvent and allow them to cancel their trip in certain circumstances.

The legislation, which has been transposed into UK law, does not cover holidays where consumers book flights and hotels separately. In addition, countries have their own regulations that ensure customers are repatriated if a tour operator collapses, such as ATOL in the UK and DRSF in Germany.

Jet2 chief executive Steve Heapy said when extreme events ruined a trip overseas those who booked a package holiday with a single provider were better placed to cope.

“Just imagine trying to get three different refunds from three credit cards at three different call centres,” he said.

Young adults were once at the forefront of the shift towards “DIY holiday booking” but they are now booking package holidays in greater numbers.

To attract more of them providers are offering interest-free repayment plans and a more diverse range of destinations — including the Azores and the Spanish seaside town of Tarifa.

Meanwhile, Jet2 has won fresh brand awareness among younger travellers thanks to viral internet content, showing holiday chaos accompanied with a narration of the company’s slogan, “Nothing beats a Jet2 holiday”. The song that has long accompanied Jet2’s adverts, Hold my Hand by Jess Glynne, has become so popular this year it has even been featured as a warm-up act at music festivals.

“Our branding has become something of a viral phenomenon this summer and we are pleased to see how many people have used it in good humour,” said a Jet2 spokesperson.

More mature package holiday providers — such as Tui — still own and operate hotels and aeroplanes, affording them less flexibility to cater for emerging or more unorthodox holiday destinations.

But newer market entrants have asset-light models, allowing consumers to create customised holidays via any available flights and properties, while enjoying the same protections as a traditional package holiday. On the Beach chief executive Morton said the most popular destination searched on its platform was “anywhere”.

Another online-only player, loveholidays, handled 5mn passenger bookings in its latest financial year, four times as many as in 2019.

Andrew Lobbenberg, an analyst at Barclays, said he believed the newer breed of package holiday providers — what he calls “tour operating 2.0” — would continue to thrive. “The whole concept has been modernised very successfully.”

Traditional providers are following their rivals. In March, Tui outlined plans to sell more seats on other airlines’ aircraft to expand its “dynamic packaging deals”. A person familiar with the company said it was selling “more packaged holidays than ever”.

Rich Robinson, head of hospitality and leisure at Barclays, said ultimately it was the fear of a ruined holiday, rather than greater choice, that was the real driver of the packaged holiday resurgence.

“People have had a lot of cancelled holidays. If you have had that experience then that’s in your mind and you want protection.”

Investors pile billions into New York office market

Rebound in CMBS borrowing tied to city’s skyscrapers signals thaw after pandemic chill

Investors are piling back into New York office buildings, lending billions of dollars to property developers in a sign big money managers see the return-to-office wave as a much-needed salve to the market.

Owners of four New York skyscrapers have tapped the commercial mortgage-backed securities market to refinance their debts in recent weeks, raising $3bn, according to documents reviewed by the Financial Times and data from Bank of America.

That has lifted borrowing tied exclusively to NY offices in the CMBS market to $11bn this year, with office financings in US securitised markets at their highest level since 2021, before the Federal Reserve began raising interest rates.

Importantly for property developers and the city, which depends heavily on the corporate sector for tax income, investors are opening their purse strings to buildings not considered trophy assets, including older towers. They see it as a sign debt markets are finally thawing for highly leased skyscrapers, particularly in crowded business districts along Sixth and Park Avenues, in Times Square and by Pennsylvania Station.

“Office is back,” said Mario Rivera, head of asset-backed securities at Fortress, a trend he put down to corporate policies demanding a return to in-person work. Pointing to a rebound on Sixth Avenue, a corridor filled with law firms, hedge funds and other financial institutions, he said “the market was shunning that space for a while but that’s no longer the case”.

Developers have clinched more than 20 CMBS financings backed solely by office properties in the US this year, up from eight for the whole of last year and none in 2023, according to BofA strategist Alan Todd. The CMBS market is just one place developers borrow to finance their properties.

Real estate developer Paramount raised $900mn in late July to refinance the debts of 1301 Sixth Avenue, home to French bank Crédit Agricole and law firm Norton Rose.

A few blocks north, Blackstone secured $850mn in debt in May, including more than $600mn through the CMBS market, as it invested alongside developer Fisher Brothers in 1345 Sixth Avenue. The tower is the future home of law firm Paul Weiss, which will pay about $81mn a year for the space, according to documents circulated to investors.

Apple’s New York City home opposite Penn Station was also refinanced by owner Vornado, raising $450mn. And the Durst Organisation clinched a $1.3bn financing backing the old Condé Nast and Skadden headquarters in Times Square, which it has since leased to companies including social media company TikTok and law firm Venable.

The deals point to a stabilisation in New York’s office debt market and a broadening of investor willingness to underwrite loans to developers. Last year and at the start of 2025, real estate businesses raised billions of dollars against a handful of marquee buildings, including a $3.5bn debt package for Rockefeller Center and a $2.9bn mortgage on The Spiral, a new building in Hudson Yards that houses HSBC.

The amount of office space available to lease has been shrinking as big companies expand in the city, according to real estate adviser CBRE. Midtown Manhattan availability rates dropped to 15.5 per cent in the second quarter from 18.2 per cent a year earlier.

Meanwhile, weekday use of the city’s subway system is rebounding, with average paid rides nearing 4mn a day, 72 per cent of pre-pandemic levels, according to New York’s Metropolitan Transportation Authority.

“Investors are seeing declining vacancy rates and net positive leasing trends . . . and saying maybe we’ve identified the floor in some of these markets,” said Matt Salem, head of real estate credit at KKR.

Salem added insurers had been big buyers of office debt this year, with investors seeking a slice of many of the NYC financings. KKR has purchased some $400mn of office-backed CMBS this year, he noted.

Investors nonetheless caution the recent dealmaking does not signal an all-clear in the office market and note the New York financings are all for buildings where a high proportion of space is already leased to blue-chip tenants, with properties that have not been renovated or are struggling to attract tenants still facing problems.

The deals also have lower leverage ratios than would have been typical before the pandemic, in a sign that lenders are requiring added protection to finance the transactions. In some cases, developers have invested extra equity in the property deals to make the debt balances more tolerable for creditors to underwrite.

“It is a tale of haves and have nots,” said Ben Hunsaker, head of structured credit at Beach Point Capital. “People are looking at availability in Park Avenue offices or Central Park view offices and are saying we can lend on this again . . . If you go out two blocks over it gets pretty ugly. I don’t know how much marginal demand comes for that.”