- New Post Office® Holiday Money Report reveals cheapest destinations
- Europe powers past long haul competitors to take eight of the top 10 places in best value barometer of 46 destinations worldwide
- Europe’s biggest price fall of 19 per cent found in Crete
- Bali loses best value title as Czech capital Prague offers lowest prices for UK tourists
- Cheapest beach resort is the Algarve but Sunny Beach and Costa del Sol are close behind
- 37 per cent fall in barometer costs makes Costa Rica one of 10 Post Office hotspot tips
Europe will be hard to beat for holiday value in the year ahead according to the ninth Post Office Travel Money Holiday Money Report. With the euro and other European currencies looking increasingly fragile against sterling, the annual report suggests that exchange rates are likely to prove game-changers when it comes to holiday choice in the year ahead.
Not only will UK tourists have more cash to spend everywhere in Europe (except Turkey) compared with a year ago¹, but lower prices in European cities and resorts have helped them fill eight of the top 10 best value places in the report’s Worldwide Holiday Costs Barometer². The cost of eight tourist staples including meals and drinks has fallen in two-thirds of the European countries surveyed – most dramatically by over 19 per cent in Crete (£41.74), which is seventh placed of 46 destinations.
Last year’s best value destination Bali has lost its title to the Czech capital Prague (£35.29), which registered the survey’s lowest price for a three-course evening meal for two with wine (£21). Although Bali remains the best value long haul resort, a 21 per cent increase in its barometer basket and the increasing power of the pound against European currencies explains why the Indonesian island (£38.09), has been overtaken and fallen to fifth position.
In a close run race, Portugal’s Algarve (£36.04) has retained its runner up place for the second consecutive year and therefore remains Europe’s best value beach resort. Prices are now over a third lower than five years ago. However, barometer falls of over five per cent in both Sunny Beach, Bulgaria (£36.14) and Spain’s Costa del Sol (£36.80) mean these UK favourites cost only a few pence more.
The biggest barometer increase in Europe has been in Turkey, where a 13 per cent rise in costs in Marmaris has largely reversed the price falls reported a year ago. As a result Turkey has dropped to 10th in the table and been overtaken by Eastern Med rival Cyprus, making its first ever top 10 appearance on the back of a six per cent fall in barometer costs in Paphos.
Andrew Brown of Post Office Travel Money said: “Holidaymakers travelling to Europe in the coming year can look forward to better value-for-money, although they should still do their homework to ensure they don’t miss out on the best deals. There is currently little difference in resort costs between the Algarve, Sunny Beach and the Costa del Sol, which are cheapest in Europe, but keep an eye on Crete and Cyprus where falls in the cost of eating out make these islands better value than ever before.”
Further afield, long haul destinations have scored both the biggest rises and falls in barometer costs. Price hikes of 66 per cent in Oman (Muscat - £120.13) and 65 per cent in Dubai (Jumeirah Beach -£144.50) have made the two Middle Eastern resorts the most expensive destinations surveyed alongside New Zealand (£126.70) and Singapore (£149.65).
By contrast the barometer basket has dropped 37 per cent in Costa Rica where resort costs have fallen sharply in Tamarindo (£54.51). The Holiday Money Report predicts that the introduction of 787 Dreamliner flights later in 2015 will boost demand for the Latin American destination and reports that this is already on the increase after Post Office Travel Money saw a 21 per cent rise in sales of the Costa Rican colon over the past 12 months.
Resort prices have also plunged 24 per cent in Mauritius (£68.30). As a result, both Costa Rica and Mauritius have been named among 10 Post Office Travel Money Holiday Hotspots for 2015³. Others in the hotlist include Mexico, where currency sales have shot up 334 per cent in five years, and Croatia, whose currency sales have more than doubled since 2011 and where resort costs (Porec) have dropped 12 per cent in a year. The fact that sterling is over six per cent stronger year-on-year against the Mexican peso and Croatia kuna should help.
Hard-hit by Air Passenger Duty in recent years, the Caribbean Islands are expected to do well in the coming year once changes to the tax come into force this spring. Although the falling value of sterling against the US dollar has had a knock on effect on costs in the Caribbean, Post Office Travel Money has picked Tobago as one of its 2015 Holiday Hotspots. The resumption of Virgin Atlantic flights to Tobago is expected to fuel demand as should the fact that the island was cheapest of six Caribbean destinations in the 2015 barometer (£72.72).
According to ABTA, over two-in-five holidaymakers booked a city break last year, making this the most popular type of holiday4. Given this trend, Eastern European cities join the 2015 hotlist, having dominated the Post Office’s City Cost Barometer best value charts in recent years. With sterling worth almost 13 per cent more year-on-year against the Hungarian forint and nearly seven per cent more against the Czech koruna, the prospects look good for Budapest and Prague. Lithuanian capital Vilnius is also tipped for success, especially if prices remain low in the eurozone’s newest member as they have done in last year’s entrant Latvia.
Andrew Brown said: “When you look at the prices charged in Prague and Budapest compared with most of their competitors, it is hardly surprising that UK tourists are choosing to visit cities where they know they can holiday for less. A 23 per cent increase in Czech koruna purchases and a huge 142 per cent rise for the Hungarian forint over five years is the clearest possible evidence that holidaymakers are checking city costs before travel and going where the pound will best serve them.
“However, holidaymakers should keep a close eye on exchange rates before deciding on a destination to see where they will get the most for their money. Just a few months ago we were reporting a five year high against the US dollar but now the pound buys almost seven per cent fewer dollars than last January. Conversely, the pound is currently worth nearly six per cent more against the euro than a year ago and has kept at high levels for much of the past year. That could change because exchange rates are unpredictable.”
Up to 70 currencies can be pre-ordered at over 11,500 Post Office branches or online at postoffice.co.uk for next day branch or home delivery. 30 currencies are available on demand at 1,600 larger Post Office branches, while over 4,000 branches offer US dollars and Turkish lira and 10,000 offer euros over the counter.
A full breakdown of findings from the Post Office Travel Money Holiday Money Report can be found in the accompanying brochure.
Note to editors:
1 Sterling is currently stronger than a year ago against half of the top 40 Post Office holiday currencies. However, the pound is stronger against 12 of 13 European currencies – the only exception being the Turkish lira, which is currently four per cent stronger than a year ago, although 19 per cent weaker than in January 2013. See Holiday Money Report page 15.
2 Post Office Worldwide Holiday Costs Barometer research (December 2014): see Holiday Money Report pages 16-17 for the full table of costs for 46 destinations (while prices are quoted by country or island, the data relates to specific resorts, nominated by tourist boards as being most popular with UK tourists or representative of average tourist prices). The barometer table was compiled with the help of national and local tourist boards and specialist tour operators – Balkan Holidays (Bulgaria), Serenity Holidays (Gambia) 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 types of purchases UK tourists are most likely to make on a foreign holiday.
3 Post Office Travel Money has identified 10 hotspots for 2014, based on a combination of factors including currency performance, new flight initiatives, low resort costs and the strength/stability of sterling. They are: the Caribbean Costa Rica, Croatia, Dubai, Eastern European cities, Greece, Iceland, Japan, Mauritius and Mexico. See Holiday Money Report pages 18-19 for analysis.
4 ABTA Consumer Trends Report (September 2014)
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