Holiday Money Index reveals pent up demand for USA and winter sunspots as Post Office currency sales climb steadily

The first Post Office Holiday Money Index of 2021 reveals pent-up demand for trips to the USA, which reopens to UK tourists from 8^thNovember. Post Office Travel Money reports that US dollar sales surged by 142 per cent year-on-year in September and October. Although the biggest year-on-year sales increase of 3,009 per cent has been for the Icelandic krona, a host of winter sun holiday resorts now released from the UK’s Covid-19 travel restrictions and led by Dubai have also seen huge rises in currency sales over the past two months (see fact sheet table 1). This comes at a time when sterling has made significant year-on-year gains against most holiday currencies.

In addition to measuring exchange rate movements and foreign currency sales trends, the Post Office Holiday Money Index also reports on holiday costs in 10 leading winter sun destinations now open to UK tourists. This found that resorts in Jamaica, Mauritius and Thailand offer the best value, while their currencies are among those suffering the biggest falls of over 10 per cent against sterling.

In fact, the Post Office Exchange Rate Monitor (fact sheet table 2) reveals that sterling has risen year-on-year against 25 of Post Office Travel Money’s top 30 currencies. The biggest gain of 20.5 per cent is against the Turkish Lira, giving holidaymakers almost £85 more cash on an average £500 currency transaction. Comparing the exchange rate now with the rate in March 2020 when lockdown started, holidaymakers will get 73 per cent more lira – amounting to over £210 extra on a £500 transaction.

Holidaymakers travelling to popular long haul destinations will also get far more cash for their pounds. The Mauritius rupee has seen the steepest fall in value of almost 14 per cent, giving UK visitors over £60 more on a £500 transaction, while holidaymakers travelling to Phuket in Thailand will get 13.2 per cent or over £58 more. The impact of sterling’s strength in these destinations, where local prices are also low, means holidaymakers can expect their travel cash to stretch much further.

This also applies to Jamaica, whose dollar has slumped by almost 12 per cent against sterling year-on-year and where the cost of a three-course meal for two and a range of drinks in Montego Bay - £52.82 - is cheapest of 10 long haul holiday destinations surveyed (fact sheet table 4). Grand Baie, Mauritius is second cheapest at £55.19, while Phuket, the first Thai destination to open to UK visitors, was placed third with a total cost of £61.45 for a meal, coffee, beer, soft drink and bottle of water.

Commenting on this, Nick Boden, Post Office Head of Travel Money, said: “The strength of sterling is a real bonus but it is also important to consider the cost of living in individual countries. When you combine the two, Jamaica and Mauritius look like winter sun winners according to our barometer of resort costs. Prices for meals and drinks are 79 per cent higher in Barbados than in Jamaica. Similarly, when you compare costs in the most popular US destinations, visitors to Orlando in Florida will pay around a third less than in New York.”

Post Office research found that meal and drinks costs in Orlando are £61.51 compared with £88.22 in New York.

More generally, currency sales have been climbing steadily since June when demand for summer holidays started to build. Euro sales have trebled since then and rose by 150 per cent year-on-year in September and October, due in part to the school half term holiday. However, the increased demand for its currency suggests that Croatia is the ‘must-go’ European destination. The Croatian kuna has now risen to third place in the Post Office list of bestselling currencies (fact sheet table 3) after registering a 1,304 per cent sales surge in September and October.

The new freedom to travel has stimulated an autumn surge in currency sales for winter sun destinations ranging from Dubai to a clutch of Caribbean islands. Sales of the UAE dirham have rocketed by 633 per cent, suggesting that significant numbers of Britons will be heading to Dubai. Barbados, St Lucia and Antigua also look set to be popular choices for winter sun trips. Sales of the Barbados dollar have risen 570 per cent rise, while purchases of East Caribbean dollars are up 400 per cent year-on-year in the past two months.

Nick Boden said: “Looking at our currency sales, the green shoots of recovery are now evident for most of the destinations now opening up to British visitors again and reveal a latent demand for hotspots in Europe and further afield. While the euro remains our biggest seller by far, there is no doubt that attention is turning to hotspots further afield as currency sales for Dubai and the Caribbean islands are among the most popular choices for our customers.”

Following a trend first reported in August 2020, Britons are continuing to take more holiday currency when travelling abroad. The average Post Office transaction on euro purchases is now up 42 per cent to £472 in the year to date, while the average spent across all currencies has risen 37 per cent to £451.

The Post Office is the UK’s leading foreign currency provider, offering around 60 currencies for pre-order at around 7,000 Post Office branches or online at www.postoffice.co.uk/travel for next day branch or home delivery. 3,600 larger Post Office branches stock the leading currencies and around 7,000 offer euros over the counter without pre-order. These can also be ordered online for same day ‘click and collect’ at selected branches, next day collection at any branch or home delivery.