Polarised Picture For Long Haul Tourists As Prices Plummet In Some Destinations But Rise In Others

- Bali and Cape Town remain best value of 34 destinations surveyed for the Post Office Long Haul Report (www.postoffice.co.uk/longhaul2014) - See-sawing local prices mean big gains for tourists visiting Tamarindo, Costa Rica; Tokyo and Mauritius but sharp resort rises in Dubai, Antigua and Hoi An, Vietnam
- Local prices rise in 63 per cent of resorts but sterling cushions the impact

Bali and Cape Town have retained their places as the best value winter sun destinations in a year when the Long Haul Report from Post Office Travel Money has revealed big price swings up and down in many of the 34 countries surveyed for the seventh annual report¹.

The Post Office Travel Money report prices, researched by the long haul tailor-made holiday specialist Travelbag, reveal a nine per cent fall in the local price of 10 tourist staples in Bali to £40, which helped increase its lead over Cape Town (£47) in the barometer table.

A combination of the weak Indonesian rupiah and local price falls in Bali mean meals, drinks and other tourist staples cost less than a third of those in the most expensive destinations surveyed. These were Muscat, Oman (£126); Auckland, New Zealand (£133); Singapore (£155) and Dubai (£161). In Dubai, prices have rocketed by 64 per cent.

At under £50, Sri Lanka, a former ‘best value’ destination, has moved up to third place in the Post Office barometer table from fifth position a year ago after recording a nine per cent fall in prices. This was due entirely to local price falls in resort areas across Sri Lanka.

The power of the pound against their currencies means there are four new entrants to the Long Haul Report top 10. In Tokyo local price falls have added to an 11 per cent rise in the value of sterling to help Japan move up to 8^th place with a barometer basket costing over a third less than last year at £66. Visitors to Mauritius (9^th place, £72) will also be far better off because tourist staples are down 24 per cent since last year. And Tobago, cheapest of six Caribbean islands surveyed at £72, has emerged as the 10^th best value resort.

This year’s biggest bargain is Tamarindo in Costa Rica (£56) where holidaymakers will find that tourist staples have almost halved in price since 2013. This means Costa Rica, which may benefit from increased interest this winter after achieving a positive profile during the World Cup, has made the biggest leap to reach sixth position in the best value top 10.

However, tourists who think winter sun trips will be cheaper because of sterling’s strength against long haul currencies could be mistaken. While prices have fallen in over a third of the 34 destinations surveyed² for the 2014 report, they have risen in 18 others.

In addition to the hefty price rises in Dubai, the barometer basket has risen 48 per cent in Antigua to just under £118 and visitors to newly-fashionable Vietnam can expect to pay 39 per cent more (£74) in Hoi An than they did in 2013. As a result the city has dropped from third to 13^th place in the barometer table and those higher prices could slow the fast level of growth that has seen Vietnamese dong sales quadruple at the Post Office over the past three years³.

The underlying cause has been local resort price increases. Out of 32 destinations surveyed for the Post Office Travel Money report last year, local prices have risen in almost two-thirds (63 per cent) of them – although those rises have been cushioned by the impact of the sterling exchange rate, which has seen the pound rise in value against every long haul currency except the Korean won and Malaysian ringgit⁴.

Andrew Brown of Post Office Travel Money said: “It all adds up to a polarised picture for UK holidaymakers. On the one hand there are great savings to be made in popular long haul resorts and tourists will be ‘quids in’. On the other, people who make the wrong destination choice could fall victim to much increased resort prices and find themselves out of pocket. That’s why it really will pay dividends to do some holiday homework and check prices for meals, drinks and other tourist staples on our website and budget accordingly.”

Travelbag holiday bookings support the idea that holidaymakers are becoming increasingly likely to book long haul holidays to destinations where sterling is strong and the cost of living low. This is borne out by year-on-year growth of 167 per cent in demand for Japan.

Rianne Ojeh of Travelbag said: “We have seen a big rise in demand for destinations like Sri Lanka, Mauritius and St Lucia, where sterling is strong and the cost of living is low, showing that our customers are savvy travellers and switched on to getting best value. The biggest increase year-on year is for Japan as consumers are recognising that the country is now much better value than in recent years. Rising prices in Vietnam, Antigua and Dubai haven’t yet impacted on demand as we have great value packages for these destinations.”

Travelbag is currently offering holidays to Sri Lanka from £549pp and Japan from £759pp⁵.

Some of the biggest price rises have been in mid-haul Middle Eastern resorts. In addition to the sharp increase in Dubai, the barometer basket has risen 48 per cent in Muscat (£126), while the Red Sea resort of Sharm-el-Sheikh in Egypt (£117) is now 90 per cent more expensive than in 2012, the last time the destination was included in the Post Office report.

Six US destinations were surveyed this year, with Austin registering the lowest prices to take 12^th position in the table. The Texan city was included for the first time because of its increased profile after the introduction of direct flights from the UK during the year. At £73, its barometer basket was 36 per cent cheaper than the same items in Miami (£114), again the most expensive US destination. Meanwhile, price falls in New York have taken the Big Apple to within spitting distance of Orlando, Florida at £75.88 and £75.79 respectively.

Andrew Brown said: “People planning long haul trips will benefit by keeping a close eye on exchange rate movements and purchasing currency when the pound moves up in value. There are improved rates for higher value transactions in our branches or online and, as more money is often needed on a long haul trip, holidaymakers can benefit by getting more travel cash for their pounds rather than changing money at the airport for a poor rate.”

Over 1,600 Post Office branches offer a wide range of long haul currencies on demand. With restrictions on importing Sri Lankan rupees, the Post Office recommends carrying cash on the Post Office Travel Money Card, a chip and PIN-enabled MasterCard accepted in over 28 million locations worldwide. All major currencies can also be pre-ordered at over 11,500 Post Office branches or online at postoffice.co.uk for next day branch or home delivery.

Holidaymakers can compare resort costs for destinations they are considering at www.postoffice.co.uk/longhaul2014.

Ends

For more information, please contact:

Gabrielle O’Gara
Post Office Press Office
0207 250 2534 / 07436 034094
Gabrielle.ogara@postoffice.co.uk

Christine Ball
CBPR
01798 874177 / 07976 285997
cball@cballpr.co.uk

Notes to editors

Prices are rounded up/down to the nearest whole number and based on the lowest average found in a resort or city popular with UK holidaymakers. A full breakdown of prices and details of the resorts surveyed can be found in the tables in the accompanying document.

¹ The Post Office Long Haul Report barometer table is compiled from a combination of data supplied by the long haul specialist Travelbag and national or regional tourist offices of participating countries (except Gambia supplied by Serenity Holidays and all six US destinations, supplied by Brand USA). Resorts featured are chosen as representative of the prices that UK holidaymakers will generally find in the country/destination. Random online checks were made to authenticate these prices. Exchange rates used are Post Office internet rates for exchange of £500-£999 on 11 September 2014.

² Resort prices have fallen year-on-year in 13 of 32 destinations that were also surveyed for the 2013 Long Haul Report (based on total costs once the sterling exchange rate was applied to local prices). Comparisons are not available for Egypt (Sharm-el-Sheikh) and Austin, Texas as these did not appear in last year’s report. The biggest price falls were as follows:

1. Costa Rica (Tamarindo) -47%
2. Japan (Tokyo) -36%
3. Gambia (Kololi) -26%
4. Mauritius (Various) -24%
5. China (Beijing) -16%
6. Australia (Darwin) -12%
7. Sri Lanka (Colombo) -9%
8. Bali (Seminyak) -9%
9. Tobago (Various) -9%
10. St Lucia (Rodney Bay) -8%

³ Source: Post Office Bestsellers and Fastest Growing Currencies Report (September 2014): Sales of the Vietnamese dong rose by a third year-on-year for summer 2014 and have quadrupled in the past three years

4 Sterling has strengthened against 25 of 27 currencies for destinations featured in the Post Office Long Haul Report (September 2014 v 2013), with the only falls against the Korean won (-2.1%) and Malaysian ringgit (-0.1%. The top ten gains were:

1. Gambian dalasis (+20.3%)
2. South African rand (+13.4%)
3. Jamaican dollar (+13.2%)
4. Japanese yen (+11.1%)
5. Costa Rican colon (+10.3%)
6. Canadian dollar (+9.0%)
7. Indonesian rupiah (+5.7%)
8. Dominican peso oro (+5.2%)
9. Australian dollar (+4.9%)
10. Mexican peso (+4.7%)

5 Travelbag (0845 543 6615) is offering packages to destinations, where prices have fallen sharply, as follows:

- Sri Lanka: seven nights in September/October 2014 from £549pp including flights and three-star accommodation
- St Lucia: seven nights in September 2014 from £679pp including flights and three-star accommodation
- Japan: five nights in December 2014 from £759pp including flights and four-star accommodation
- Mauritius: seven nights in June 2015 from £759pp including flights and three-star accommodation