We used to pay for a good hotel — today we pay for the right to cancel it
Wars, flight cancellations, fires, and heatwaves are making vacations a product that is harder to commit to months in advance. The result is a shift in booking habits: more last-minute decisions, closer destinations, more expensive insurance, and an extra premium for the option to change plans. In such a world, the cheapest room or ticket is no longer necessarily the best deal.
Until recently, it was relatively easy to compare vacation prices. We opened a booking site, checked hotel costs, compared flights, and looked for the lowest price. A room for 150 euros was cheaper than one for 180 euros, and a flight for 300 dollars was a better deal than one for 400 dollars. This calculation is starting to change.
In a world where a war can close flight routes within hours, a fire can lead to the evacuation of a resort area, and a heatwave can disrupt trains, events, and travel plans, the product a tourist buys is no longer just a hotel room or an airplane seat. They are also buying the ability to change their mind. Anyone booking a hotel encounters the same choice in almost every search: a higher price without a refund, or a slightly higher price with a cancellation option. Airlines offer similar versions, and travel insurance or weather-related compensation services are increasingly becoming part of the vacation cost rather than just extras.
Plan B as the new norm
Reuters reported in May that the current geopolitical situation is changing how European tourists plan their summer vacations. Travelers are booking later, staying closer to home, often preferring trains and cars over long flights, and trying to keep their options open. The director of the French resort company Vacances Bleues noted that last-minute bookings have increased by about 15%. This is not necessarily a decrease in demand, but rather a reluctance to commit.
For years, the industry encouraged early booking. Anyone who knew in August where they wanted to fly for the next Passover could lock in a price and enjoy a sense of security. Now, security works in the opposite direction: what is the point of locking in a good price if we are locked in with it? The war in the Middle East demonstrated this clearly: at the beginning of the conflict, more than 21,000 flights were cancelled at seven major regional airports, including Dubai, Doha, and Abu Dhabi. The problem is no longer just safety at the destination, but whether the entire route will take place as planned.
Weather as part of the contract
In recent years, a variable even harder to predict has been added to the mix: the weather. At the end of July, giant fires in France and Spain forced hundreds of thousands of people to evacuate. Many popular tourist destinations were affected during peak season. In French campsites, the industry reported numerous cancellations in August, a month that usually accounts for about 40% of their annual revenue.
Even without fires, the heat itself can change a vacation. During the European heatwave in June, dozens of intercity trains were cancelled in France, and Italian cities were placed on high alert.
How much is the right to regret worth?
Economically, a room with free cancellation is a different product than a non-refundable one. Suppose a room costs 800 shekels without a refund and 950 shekels with a cancellation option. The 150-shekel difference is the cost of the option. In a stable world, the value of this possibility is low, but as the world becomes less predictable, its value rises. Consumers have already voted with their wallets: demand for "Cancel For Any Reason" insurance rose by 34% in 2025, according to Squaremouth.
Booking sites often rank us automatically by the lowest price, masking the true economic cost. If the chance that you will need to change plans is high, a non-refundable tariff might actually be the most expensive product. One cancellation of a vacation costing thousands of shekels is enough to wipe out years of savings from choosing cheap tariffs.
The tourism industry has discovered that it is possible to sell certainty. Airlines, hotels, and insurance companies offer various levels of flexibility. There are even parametric insurance policies where the customer receives automatic compensation for flight delays or specific weather events. Ironically, the less certain a vacation becomes, the more money companies can charge to sell us back the certainty we lost. Flexibility has gradually become a premium product, and for the next booking, the most important metric will not be how much we managed to save, but how much of the vacation we can change without losing money.
