Holiday Money Index reveals strong demand for Caribbean and South American currencies as winter sun season gets underway
Post Office Travel Money’s latest Holiday Money Index covering foreign currency sales from 1st January to 30th September 2019 confirms a strong appetite for overseas travel even though ongoing volatility in currency markets is having a daily impact on the value of sterling as the deadline for the UK to leave the European Union approaches. The pound has rallied significantly in recent days after a draft agreement was announced.
While its analysis of exchange rate movements reveals that sterling is now weaker than a year ago against 45 per cent of the top 40 currencies and has fallen by up to six per cent on six months ago against 16 of the 40 currencies, Post Office sales suggest this has not deterred Britons from travelling abroad – particularly to long haul destinations. The UK’s leading foreign exchange provider, which accounts for one-in-four transactions, says euro and US dollar sales remain strong and stable. In September, as the winter sun season got underway, its 10 fastest growing currencies registered sales increases of 30 per cent or more. All 10 were currencies for long haul destinations.
The most notable strides have been made by the Japanese yen, where 2019 sales have risen 42 per cent compared with last year, even though it is among a number of Far Eastern currencies against which sterling has fallen in value significantly. A key factor has been the Rugby World Cup, which led to a 233 per cent rise in yen sales during September. Another is the low cost of living. Despite a 4.4 per cent fall in sterling’s value, Japan was rated cheapest in the 2019 Post Office Long Haul Holiday Report, which explains why the country is attracting growing numbers of visitors.
Similar levels of growth have been recorded for the Trinidad & Tobago dollar – but without the impetus of a sporting event to account for this. Sales have increased by 53 per cent year-on-year in 2019 to date but accelerated to 205 per cent in September. The Trinidad & Tobago dollar was among a number of Caribbean currencies to register big year-on-year sales increases last month, indicating that Caribbean holidays are a popular choice this winter. Jamaican dollar and Barbados dollar sales rose by 37 and 36 per cent respectively in September, while there was an increase of 32 per cent in Dominican peso sales and six per cent growth for the East Caribbean dollar.
Falling resort prices help to explain the popularity of the Caribbean islands because Post Office consumer research1 found that 77 per cent of holidaymakers are now worried about resort costs. In the Long Haul Holiday Beach Barometer2 researched for the Post Office by leading long haul holiday operator Travelbag, there were price falls of 32.4 per cent in Antigua as well as cost
reductions for UK visitors in St Lucia (-8.0 per cent) and Tobago (-8.6 per cent). The barometer
reveals that prices have fallen in nine of the 16 resorts surveyed.
Nick Boden, Post Office Head of Travel Money, said: “Holidaymakers are now recognising that it is not just exchange rates that affect how far their holiday budget will stretch. Sterling may have weakened against many currencies but only 55 per cent of holidaymakers told us that this is a big issue for them. Far more of them – over three-quarters according to our latest research – are worried about the prices they will face in resorts so it is understandable that they are picking destinations where the cost of meals, drinks and other staples is lower.”
Good examples of this trend are Bali and Vietnam, whose resorts rate as best value this winter according to the Long Haul Holiday Beach Barometer. Local prices in Kuta (Bali) and Hoi An (Vietnam) are the lowest out of the 16 destinations surveyed for the Post Office by Travelbag researchers even though their currencies are among ten that have strengthened most against sterling year-on-year. The Indonesian rupiah is 8.2 per cent stronger than a year ago and the Vietnamese dong has risen 1.9 per cent.
Another destination where prices have fallen, while its currency has strengthened against sterling is Dubai. The Long Haul Holiday Beach Barometer reveals a 13.3 per cent drop in resort costs at the same time that Dubai’s currency, the UAE dirham, has risen 1.3 per cent against sterling.
Sterling’s biggest year-on-year falls in value have been against the Egyptian pound (-10.6 per cent) and Thai baht (-8.3 per cent). In the case of Thailand, rising local prices in its top resort, Phuket, have compounded the impact of the weak pound. Beach Barometer prices have mushroomed by 15.6 per cent, the biggest price rise among the 16 surveyed.
Latin America is another holiday region that looks set to be popular with long haul holidaymakers. Three currencies feature in the 10 Post Office Fastest Growing Currencies for September 2019. In fifth place, the Costa Rican colon has recorded a 41 per cent rise in sales despite having risen 3.4 per cent against sterling since last October. The Chilean peso (8th, +35 per cent) and Peru nuevo sol (10th, +30 per cent) have also seen strong growth.
In Europe, the region where UK holidaymakers will get more foreign currency for their pounds is Scandinavia. At a time when Norway attracts UK visitors to see the Northern Lights, sterling has strengthened by 10.1 per cent year-on-year against the Norwegian krone. The UK pound is also 6.4 per cent stronger against the Swedish kronor and has risen 5.4 per cent against the Icelandic krona.
In fact, Europe accounts for seven of the currencies that have weakened against sterling. City breaks remain the most popular holiday choice for Britons and the weakness of the Hungarian forint should prove an incentive for visits to Budapest, which recently topped the chart of best value cities for a cultural break. With sterling now 4.8 per cent stronger than a year ago, the Hungarian capital should be a top choice for an Advent Markets visit in the run up to Christmas.
Nick Boden said: “No-one really knows what is going to happen to sterling in the coming weeks, so the best advice for those planning holidays abroad is to do their homework on resort and city costs and set a realistic budget. Our research reveals an average overseas spend of over £500 so it makes sense to take advantage of the improved exchange rates offered in our branches and online when you change this amount. Changing money abroad could cost more as rates may be poor and charges made on ATM transactions.”
The Post Office is the UK’s leading provider of foreign currency, offering euro on demand at over 9,000 branches and US dollars in around 3,000. 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, for next day collection at any branch or home delivery.
For more information, please contact:
Christine Ball CBPR 01798 874177 / 07976 285997 firstname.lastname@example.org
Joanne Leahy Post Office Press Office 07791 894469
Notes to editors:
1 Post Office Travel Money research conducted by Populus among 2,087 UK adults (12-14 April).
2 Long Haul Beach Barometer, October 2019, researched for Post Office Travel Money by Travelbag:
|Bali||Hoi An||Mombasa||Columbo||St. John|
|Cup of filter coffee - café/bar||£1.96||£1.70||£1.70||£1.65||£2.47|
|Bottle of local lager - café/bar||£1.81||£0.93||£3.03||£1.41||£1.55|
|Bottle/can of Coca-Cola - café/bar||£1.20||£0.74||£1.42||£1.41||£1.55|
|Glass of wine - café/bar||£4.34||£3.94||£4.45||£3.29||£3.09|
|Cocktail - café/bar||£5.12||£7.41||£4.85||£4.71||£4.95|
|Small chocolate bar (58g Mars/Snickers or similar)||£0.69||£1.85||£0.73||£0.71||£0.93|
|Bottle of still mineral water (1.5 litre) - supermarket||£0.48||£0.56||£0.65||£0.38||£1.55|
|Suncream (SPF15 Nivea or similar) - supermarket||£11.14||£4.45||£10.52||£5.18||£7.22|
|Insect repellent (small bottle/tube) - supermarket||£0.64||£1.85||£0.69||£2.59||£4.62|
|3 course evening meal for two adults incl. bottle of house wine||£40.96||£47.39||£42.87||£53.70||£50.08|
|Cancun||Penang||Grand Baie||Tamarindo||Rodney Bay|
|ITEMS||MEXICO||MALAYSIA||MAURITIUS||COSTA RICA||SAINT LUCIA|
|Cup of filter coffee - café/bar||£1.72||£1.98||£2.20||£1.65||£2.16|
|Bottle of local lager - café/bar||£1.08||£3.16||£3.47||£2.74||£1.85|
|Bottle/can of Coca-Cola - café/bar||£1.08||£1.28||£1.92||£1.50||£1.00|
|Glass of wine - café/bar||£4.74||£4.54||£4.04||£5.72||£5.10|
|Cocktail - café/bar||£5.17||£4.94||£7.86||£5.41||£6.96|
|Small chocolate bar (58g Mars/Snickers or similar)||£0.65||£0.89||£0.51||£1.11||£0.66|
|Bottle of still mineral water (1.5 litre) - supermarket||£0.90||£0.59||£0.60||£1.96||£0.69|
|Suncream (SPF15 Nivea or similar) - supermarket||£12.92||£12.25||£14.09||£9.49||£7.65|
|Insect repellent (small bottle/tube) - supermarket||£6.46||£2.57||£3.23||£5.93||£4.16|
|3 course evening meal for two adults incl. bottle of house wine||£44.71||£52.36||£66.64||£74.45||£74.19|
|Montego Bay||Phuket||Scarborough||Jumeirah Beach||St. James||Mahé|
|Cup of filter coffee - café/bar||£3.07||£1.63||£2.18||£1.77||£3.35||£3.74|
|Bottle of local lager - café/bar||£4.83||£2.04||£1.68||£8.84||£3.35||£4.99|
|Bottle/can of Coca-Cola - café/bar||£2.23||£0.82||£1.12||£2.43||£2.52||£4.05|
|Glass of wine - café/bar||£5.64||£4.90||£4.99||£10.61||£7.55||£5.92|
|Cocktail - café/bar||£7.46||£4.90||£6.86||£10.61||£7.55||£5.92|
|Small chocolate bar (58g Mars/Snickers or similar)||£0.99||£0.95||£1.12||£0.48||£1.03||£3.12|
|Bottle of still mineral water (1.5 litre) - supermarket||£0.74||£0.54||£1.18||£0.22||£1.89||£1.25|
|Suncream (SPF15 Nivea or similar) - supermarket||£13.69||£5.04||£9.97||£9.56||£13.42||£18.70|
|Insect repellent (small bottle/tube) - supermarket||£8.67||£2.72||£3.43||£5.03||£10.48||£14.03|
|3 course evening meal for two adults incl. bottle of house wine||£63.49||£89.36||£82.91||£93.27||£118.23||£115.34|
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