Press release -
Sterling recovery means cash bonus for holidaymakers – but currency sales suggest long haul destinations may win out
Holidaymakers visiting most overseas destinations this year are likely to benefit from a big cash bonus because of sterling’s strong recovery in recent months. However, when it comes to choosing a destination, Post OfficeTravel Money analysis of currency sales for its January-March 2018 Holiday Money Index suggests UK tourists may be looking further afield than Europe. Sales of long haul holiday currencies are already surging ahead of 2017 levels but a more cautious approach appears to be being adopted for some European ones.
Andrew Brown of Post Office Travel Money said: “Sterling has been rising in value against European currencies in the past month and it may be that holidaymakers planning European trips are holding off changing money to see whether the pound rises further. On the other hand, the surge in long haul currencies may be an indication that canny travellers are travelling to destinations further afield after reports of rising Eurozone prices.”
The uneven picture revealed by the Holiday Money Index of sales trends at the UK’s largest foreign exchange provider comes at a time when 80 per cent of the Post Office’s top 40 currencies are now weaker against sterling than a year ago. All barring one of the top 40 (the South African rand) have also been falling in value over the past six months.
Although the pound’s biggest year-on-year gains have been against the Turkish lira (+27.7 per cent) and Russian ruble (+25.8 per cent), 18 of the 20 currencies that have fallen in value by 11 per cent or more against the pound are for long haul destinations. These include the US dollar, which is down 14.7 per cent against sterling year-on-year, and the Caribbean and Middle East currencies like the Barbados dollar and UAE dirham that are fixed to the dollar.
Sterling’s strides against non-European currencies explain why nine of the Post Office’s 10 fastest growing currencies for January-March are long haul ones. They include the Barbados dollar: sales grew 29 per cent after the currency fell heavily against the pound (-14.7 per cent year-on-year on 17 April exchange rates).
The fastest growing currency of all has been the Thai baht, which has surpassed its strong performance in the second half of 2017. Last year’s 33 per cent rise in sales has been exceeded by a year-on-year sales surge of 42 per cent in the first three months of 2018. Sterling is currently 4.2 per cent stronger against the Thai baht than last April.
Andrew Brown said: “UK holidaymakers are becoming savvier when it comes to working
out where their pounds will stretch furthest. Thailand has always had a great reputation for
value so it is not surprising to see a marked upturn in demand at a time when prices seem to be on the rise in Europe. In our recent pricing surveys, Bangkok was the cheapest long haul city and Phuket was the cheapest long haul family destination.”
The clearest correlation between sterling rate gains and currency sales has been for Latin-American currencies, most notably the Brazilian real (+25.6 per cent), 10th in the fast growing currencies table (sales up five per cent) and Costa Rican colon (+15.6 per cent). Costa Rica continues to gain ground as direct flights boost interest in the destination and last month Post Office saw colon sales rise 17 per cent as the summer season got underway.
The Peru sol has also dropped sharply since last April. A 13.7 per cent fall in value helps account for a 19 per cent sales rise, making this the fourth fastest growing currency this year.
In Europe, sales of the euro remain buoyant even though this is one of only seven currencies – all of them European ones - that are stronger against sterling than a year ago. However, the pound is just 1.7 per cent weaker against the euro year-on-year and has been moving up in value in recent weeks. It is now 3.5 per cent stronger than at its year-low in March.
Despite the fact that the Croatian kuna also remains stronger against the pound – by 1.9 per cent year-on-year, Post Office sales of the currency are soaring. A 32 per cent sales rise for January-March 2018 makes the kuna the Post Office’s second fastest growing currency and underlines Croatia’s growing reputation as Europe’s most desirable tourist destination.
Andrew Brown said: “The appetite for travel to Croatia seems insatiable. Our kuna sales have quadrupled over the past decade with no sign yet of a plateauing in demand. While there have been reports of a slowdown in bookings for some other European destinations this year, Croatia seems to be a big exception.
“Another exception is Turkey where tour operators are reporting huge increases in demand. This is hardly surprising given the collapse of the Turkish lira, which has halved in value over the past five years and is currently worth almost 28 per cent less than last April. When you consider that tourists changing £500 into lira will get the equivalent of £108 more in cash, it is hardly surprising that we have seen lira sales grow by 30 per cent year-on-year in March.”
Elsewhere in Europe the news is not so good. UK tourists visiting Eastern Europe on city breaks will get less cash for their pounds because sterling has weakened against the Czech koruna (-7.0 per cent), Polish zloty (-3.8 per cent) and Hungarian forint (-2.6 per cent).
Post Office Travel Money offers euro on demand at over 10,000 branches and US dollars in more than 4,000. A wide range of currencies can be ordered at over 1,600 Post Office branches nationwide for next day collection. Euros and US dollars can also be ordered online at postoffice.co.uk for same day collection at selected branches and next day collection at any branch or to customers’ homes.
ENDS
For more information, please contact:
Joanne Leahy Post Office Press Office 07791 894469
Christine Ball CBPR 01798 874177 / 07976 285997 cball@cballpr.co.uk
About the Post Office
Post Office Limited has an unrivalled national network of over 11,600 branches across the UK, more than all the high street banks combined, and sits at the heart of many communities across the country.
It provides around 170 different services and products spanning financial services including savings, insurance, loans, mortgages and credit cards. Post Office also offers Government services, telephony, foreign currency, travel insurance and mail services.
99.7% of people live within three miles of their nearest Post Office outlet. For many rural communities the Post Office is the only retail outlet. Post Offices remain highly valued and trusted and are the focal point for many communities. For more information, visit www.postoffice.co.uk.
