Press release -
SUNNY FORECAST FOR HOLIDAYMAKERS AS PRICES FALL ABROAD
Post Office® Travel Money’s 10th Holiday Money Report reveals best value hotspots (postoffice.co.uk/holidaymoneyreport)
- Prices plummet by up to 31 per cent in over half of resorts and cities worldwide
- 19 per cent price fall makes Portugal’s Algarve cheapest for UK tourists
- Cape Town powers past Bali to become best value for long haul travellers
- Australia, Costa Rica, Iceland, Vietnam and Peru are named among 10 hotspots for 2016 as Post Office reports surging demand for their currencies
The strength of sterling looks set to play a pivotal role in holiday destination choice according to the Holiday Money Report 2016 from Post Office Travel Money. The 10th annual reportreveals that three-quarters of the Post Office 40 bestselling currencies are weaker against sterling than a year ago and holidaymakers will benefit from the marked impact this is having on tourist prices in many of the world’s most popular resorts.
Research for the Worldwide Holiday Costs Barometer published in the report reveals that the cost of eight tourist staples, including meals and drinks, has fallen in 23 of the 44 key worldwide destinations surveyed¹. The power of the pound is the main reason for this, although local price cuts are a contributory factor in 13 destinations². Post Office Travel Money reports falls of 15-20 per cent in 10 destinations, and a 31 per cent drop in Penang, Malaysia (£64.05).
Portugal’s Algarve (£29.32) tops the barometer chart as the cheapest destination for UK tourists for the first time in five years. With prices down over 18 per cent year-on-year, the Algarve is one of eight European destinations that dominate the best value top 10 for the second year running. As a result of the value available to UK tourists, particularly for meals and drinks, Portugal features in the Post Office Travel Money list of 10 hotspots for 2016³.
Registering a similar 18 per cent price fall, the Bulgarian resort of Sunny Beach (£29.49) is a close runner up, just 17 pence behind the Algarve. By contrast, some local shop and bar prices have risen in the Costa del Sol (£35.61) so the gap between fourth-placed Spain and the two chart-toppers has widened to over £6 from just £1 last year.
Prices in Cape Town (£34.55) are down 20 per cent, one of only two long haul destinations to make the leading 10 destinations. As a result of the great strides made by sterling against the rand in recent months, the city has powered past Bali to make it lowest-priced of 32 long
haul destinations surveyedand third cheapest overall. With sterling now worth 28 per cent
more than a year ago, equating to £111 extra cash on a £500 currency purchase, Post Office Travel Money has chosen South Africa for its 2016 hotlist.
Bali (£40.35) retains its top 10 position but local prices are on the rise. Although sterling’s continuing strength against the Indonesian rupiah cushions the blow, barometer costs have risen nearly six per cent, resulting in Bali’s fall to eighth in the table.
There have also been price increases in Prague (£40.19), last year’s best value destination. Rising meal costs have made the Czech capital almost 14 per cent more expensive year-on-year and resulted in its fall to seventh position, just below city break rival Budapest (£39.40). Prices are on par with 12 months ago in Hungary’s capital but its weak currency means that Budapest is almost four per cent cheaper than a year ago. These factors, together with its popularity for celebration breaks, make Budapest another Post Office hotlist tip for 2016.
Three Eastern Med resorts – Marmaris (£38.83), Paphos (£41.58) and Corfu (£43.42) – fill the remaining top 10 places. Corfu is a new entry, rising to 10th place from 14th last year on the strength of lower meal prices, which have helped to make the Greek island over 19 per cent cheaper than a year ago.
Just outside the best value top 10, barometer prices have dropped 18 per cent compared with a year ago in Tokyo (£46.58). A combination of falling prices and the weak yen are making the Japanese capital far more affordable for UK tourists and they have been quick to take advantage as Post Office yen sales surged by 26per cent last year rising to 81 per cent over the past five years. With new transport links scheduled in the coming months to boost tourism outside Tokyo, Japan has made the Post Office hotlist for the third year running.
Andrew Brown of Post Office Travel Money said: “If sterling continues to hold its value, UK holidaymakers will have plenty of choice in the coming year. In Europe the best deals are likely to be in Portugal and Bulgaria, where increased competition to attract tourists has resulted in lower prices for tourist staples. Once the exchange rate is factored in, tourists should see their spending costs shrink. For those travelling further afield, Cape Town, Bali and Tokyo look good bets for the bargain-hunter.”
There is no such good news for transatlantic travellers because the dominant dollar – currently worth 3.2 per cent less than a year ago- has had a negative impact on the prices tourists will pay in the USA. Orlando (£68.54) again emerges as best value, although prices are up almost nine per cent and the resort can only make 21st place. Boston (£79.88) is the least expensive of four US city break destinations surveyed (San Francisco, £86.01; New York, £86.15 and Washington D.C., £90.71).
UK tourists travelling to most Caribbean islands or the Gulf States also face rises because their currencies float alongside the dollar and have strengthened to a similar degree against sterling. Barometer prices are highest in Dubai (150.38), while two of the most popular Caribbean islands – Antigua (£134.94) and Barbados (£117.50) – also feature in the bottom four. Jamaica registered the biggest price rise of over 30 per cent in Montego Bay (£100.91).
New Post Office currency sales data published in the Holiday Money Report reveals that exchange rates have exerted a strong influence on destination choice. Eight destinations that rated among the Post Office’s 20 Fastest Growing Currencies of 2015 are named on the 2016 hotlist and the currencies for six of these – Australia, Vietnam, Japan, Peru, South Africa and Budapest – have lost ground against sterling.
For example, sterling has risen in value by more than a third against the Australian dollar over the past five years and this helped to stimulate a 15 per cent growth in currency sales in 2015. Sales of Peru’s nuevo sol rose 27 per cent last year at the same time that the currency slumped by 11 per cent or more against sterling. With new direct flights set to start this spring, Peru will be an attractive option for more adventurous holidaymakers.
Post Office Travel Money’s Andrew Brown said: “When you look at many of the fastest growing currencies over the past year, it is clear that the strength of sterling has played an important part in determining holiday choice. The evidence suggests that holidaymakers have been doing their homework before booking and checked to see where their pounds would stretch further. Aspirational destinations like Australia, Peru and Japan have become more affordable and are among the most obvious beneficiaries of this.”
Costa Rica, Iceland and the Spanish mainland are also named on the hotlist. Andrew Brown continued: “The Costa Rican colon was the Post Office’s fastest growing currency of 2015 with sales up 46 per cent while demand for the Icelandic krone has mushroomed by 276 per cent in the past five years – taking it into the top 20 bestsellers for the first time. New flights to Costa Rica and Iceland are expected to help boost demand still further in 2016.”
The Post Office is the UK’s leading provider of foreign currency, offering euro on demand at over 10,000 branches and US dollars at 4,000 branches. 1,600 larger Post Office Branches stock 30 leading currencies while up to 70 currencies can be pre-ordered at over 11,500 branches or online at postoffice.co.uk/travel for next day branch or home delivery.
ENDS
A full breakdown of findings from the Post Office Travel Money Holiday Money Report can be found in the accompanying brochure.
Notes to Editors:
1 Post Office Worldwide Holiday Costs Barometer research (December 2015): see Holiday Money Report pages 4-5 and the attached full tables of costs for 44 destinations. The barometer was compiled with the help of national and regional tourist boards and specialist tour operators Balkan Holidays (Bulgaria) and Travelbag (various long haul destinations). Eight items – a three course meal for two with wine, cup of coffee, bottle of local beer, can of Coca-Cola, glass of wine, bottle of still water, suncream and packet of cigarettes – were selected as representative of the purchases UK tourists are most likely to make on a foreign holiday.
2 Post Office barometerresearch revealed local price cuts in 13 destinations surveyed: Bulgaria, Canada, Croatia, Greece, Italy, Japan, Kenya, Malaysia, Malta, New Zealand, Oman, Portugal and Singapore.
3 Post Office Travel Money’s 10 2016 hotspots are based on factors including currency performance, new flight routes, low resort costs and the strength of sterling. They are: Australia, Budapest, Costa Rica, Iceland, Japan, Peru, Portugal, South Africa, Spanish mainland and Vietnam. See Holiday Money Report pages 2-3.
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