Sunday, 28 February 2016

Cheaper travel costs offset £ slump

THE POUND has plunged to a 13-month low against the euro and some other European currencies, but there is still good news for people planning trips abroad in one of the busiest holiday booking months.

Research by Post Office Travel Money for its Holiday Money Report reveals that lower prices in most European resorts will cancel out the impact of the sterling slide. At the same time, currencies for many popular long-haul destinations including Mexico, Malaysia, and Thailand have weakened against sterling.

The biggest gain for sterling has been against the South African rand, so UK tourists on safaris, fly-drive trips along the Garden Route, or exploring Cape Town will see their travel cash stretch 26 percent further than last year. In just five years sterling has doubled in value against the rand.

Sterling is also surging against the Mexico peso, which means that Cancun will be a bargain bet in 2016. Holidaymakers heading east will be better off in Asia and the Indian Ocean, too. A sterling surge of over nine percent against the Malaysian ringgit compared with a year ago has compounded the impact of falling prices in Penang to make tourist staples 27 percent cheaper in Malaysia’s most popular destination. Sterling has strengthened by 1.5 percent against the Thai baht year-on-year.

While the US dollar is at a five-year high against the pound, making Orlando and New York some 10 percent more expensive, three other dollars are significantly weaker. The Australian, New Zealand and Canadian dollars have each fallen in value since last February, and are now over 10 per cent weaker than two years ago.

The Norwegian krone has lost value against sterling. A six percent year-on-year drop, rising to 22 percent over two years, makes a Northern Lights trip to Norway a better prospect than visiting Iceland for the Aurora Borealis. Sterling has fallen 10.5 percent in value since last February against the Icelandic krona.

Andrew Brown of Post Office Travel Money said: ‘This is definitely a year when it will pay people to do their homework before booking a destination. With sterling’s recent fall in value against more than half of our bestselling currencies, you can’t blame them for thinking twice about where to go on holiday. However, canny travellers will be quids in if they opt for destinations with weak currencies or those where local prices are low. Better still, if they combine both elements their holiday money will stretch further.’

Despite a fall of more than 10 percent since last summer, when sterling hit €1.41 to £1, the picture is far from gloomy for people planning visits to the eurozone. Post Office Travel Money research shows that fierce competition to attract tourists has led to hefty price-cutting in many popular holiday destinations – resulting in lower rather than higher prices this year.

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