A travel industry expert has predicted that many tour operators and travel companies will start to offer free Covid tests to holidaymakers.

Paul Charles, chief executive of travel consultancy the PC Agency, made his comments as travel company On the Beach announced that it would begin to offer free Covid tests in an industry first.

The tour operator said it decided to hand out free antigen and PCR tests after a study revealed that the price of tests was preventing people from travelling. The firm has teamed up with government-backed testing provider Collinson to provide free Covid tests – to those living in England and Northern Ireland only – for departures in 2021, in time for October half-term.

Charles said many others in the industry could now follow suit. “It is very encouraging that On the Beach have taken this step,” he said. “I am aware of many luxury high-end operators who have been offering this, but this is the first mass-market tour operator to do this and it will give others the confidence to do the same. This is definitely the start and we will definitely see others doing the same.”

In May, On the Beach announced that it would not sell summer holidays from June to August because of the uncertainty around travel. However, it recently reopened package holiday bookings and is offering free Covid-19 tests for any new bookings to Spain and Greece provided the booking is made before 30 September for a departure in 2021.

Customers’ tests will be ordered automatically on booking and delivered a minimum of 48 hours prior to departure, with one antigen test to be taken on holiday prior to return to the UK and one PCR test to be carried out on, or before, day two after arrival in the UK.

The holiday firm says it has created a £1.5m fund dedicated to helping rebuild consumer confidence in travel, which will be used to fund the free tests, after research revealed almost a third of people said the main reason why they had not booked a holiday for 2021 was because of costly testing.

A quarter of people who are not planning holidays this year said they would be more likely to book if they were offered free Covid tests.

A spokesperson said: “These tests are known for being a bit on the pricey side, but if you book a 2021 flight-inclusive package holiday to Spain, the Balearic Islands, Canary Islands, Greece or Cyprus with us before the end of September, we’ll get you your tests for free.”

This comes as the government considers whether to scrap the current travel traffic light system, with insiders saying changes could be announced in the coming weeks. Green and amber categories could be removed in favour of rules based on the Covid vaccination status of travellers – in an effort to simplify holidays

The red category, which is for countries that the government says should not be visited, is expected to remain.