Price falls abroad will help holiday budget stretch further

13^th annual Post Office Holiday Money Report reveals the best 2019 holiday hotspots for bargain hunters (www.postoffice.co.uk/holidaymoneyreport)

• Prices plummet by up to 21 per cent in almost half of resorts and cities surveyed for the Worldwide Holiday Costs Barometer - biggest falls in Singapore and St Lucia
• Bulgaria, Turkey and the Algarve are rated best value among 42 destinations
• South Africa’s Cape Town overtakes Japan as the cheapest long haul option
• Top 10 entrant Bali reaps benefit of low prices and a weak currency: rupiah sales surge 483 per cent in 10 years on the back of an 18 per cent fall against sterling

With overseas holiday bookings already showing a marked increase for 2019¹, Post Office Travel Money’s annual Holiday Money Report suggests that the strength of sterling and prices in resorts are set to play a pivotal role among Britons yet to choose their destination. Despite the challenge of a volatile pound, the report reveals buoyant demand for its bestselling currencies, led by the euro, as well as big price falls in top holiday hotspots.

Contrary to expectation that the seesawing value of sterling against major currencies would result in higher prices for UK visitors, the Worldwide Holiday Costs Barometer published in the reportreveals that costs for eight tourist staples including meals and drinks have fallen in almost half of the 42 destinations surveyed – including six of 12 European ones.

Singapore (£120.66) and St Lucia (£80.09) head the list of 19 destinations where holiday costs have dropped in the past year² – in the Chinatown area of Singapore by 21.5 per cent and in Montego Bay by 19.6 per cent. The cost of St Lucia’s barometer basket was far cheaper than in four other Caribbean islands (Antigua, Barbados, Jamaica and Tobago).

While those falls are the result of cheaper local charges for meals and drinks, a sharp rise in the value of sterling against the Brazilian real explains why prices have plunged by almost as much in Rio de Janeiro where the barometer basket totals £111.19, a fall of 19.5 per cent.

The well-documented volatility of the Turkish lira also explains why Marmaris, Turkey’s most popular resort, is one of three European beach destinations that take the top three places in this year’s barometer³.Prices have fallen 18.7 per cent since last year to £45.23.

But the Turkish resort has to settle for runner-spot behind Sunny Beach, Bulgaria.Prices in the Black Sea resort are over £9 lower - £36.03 – than in Marmaris and five per cent cheaper than last year when it also topped the chart.Portugal’s Algarve (£50.11), a past winner, is in third place although prices for the barometer basket have risen 13.2 per cent.

However, a price fall of two per cent to £54.12 has helped Spain’s Costa del Sol to close the gap on the Algarve and move up to fifth place in the table.

Post Office Travel Money expert Andrew Brown said: “It is good news that prices are down in many destinations this year, but it is still very important to be aware of the huge variation in costs we found across the 42 countries surveyed.For example, barometer costs in the six cheapest resorts and cities are less than half those in the 15 priciest destinations.

“That’s why we advise holidaymakers to draw up a destination shortlist and do their homework by comparing the prices for meals, drinks and other tourist items before booking. Forearmed is forewarned!”

Adding to the falls recorded in Sunny Beach, Marmaris and the Costa del Sol, three other European destinations also saw sizeable year-on-year price reductions.These were Malta (Sliema, 12^th, £71.41 – down nine per cent), France (Nice, 20^th, £91.86, down 13.7 per cent) and Greece (Corfu, 21^st, £96.06, down 7.8 per cent).This positive pricing news comes as the Post Office reported that euro sales had soared by almost five per cent in the final months of 2018 and that other European currencies had seen sales surges too.

Commenting on this Andrew Brown said: “Short travel times will always give European destinations an inbuilt advantage and, despite speculation that rising prices would put UK holidaymakers off travelling to the continent, strong currency sales for the euro, Turkish lira, Bulgarian lev and Croatian kuna over the past year underline the fact that Europe remains the destination of choice for most people.

“However, the stampede for Turkish holiday packages seen last summer sends a clear message that holidaymakers will be looking carefully to see where they can get the most bang for their buck and may be prepared to swap destination for a cheaper deal.”

Sorrento in Italy emerged as the most expensive of 12 European destinations after registering a price rise of over 30 per cent. At £119.03, its prices were over twice as high as those in Sunny Beach, Marmaris, the Algarve and the Costa del Sol.

Further afield, the cheapest long haul destination was South Africa, which has been attracting growing numbers of UK visitors because of its favourable exchange rate and low cost of living. Fourth in the barometer, Cape Town’s holiday cost of living has fallen by almost nine per cent to £50.23, building further on the benefit of last year’s 16 per cent drop.

Conversely, a 29 per cent price increase for Tokyo to £55.55 means that Japan has fallen from second to sixth place - although it remains five per cent cheaper than in 2016 when it first hit the Worldwide Holiday Costs Barometer best value top 10.

Two other long haul destinations – Mombasa, Kenya and Bali - made it into the best value top 10. Mombasa rose to seventh in the table from 13^th last year, earning that place because of a sharp 16.3 per cent price fall to £55.87.Competitive pricing in tourist restaurants rather than exchange rates accounts for the fall because the Kenyan shilling is one of the currencies to have strengthened most against sterling.

With just three pence in it, Bali (£69.49) narrowly pipped Hoi An, Vietnam (£69.52)to take 10^th place and reap the benefit of cheap local prices and a weak currency.In the past decade the Indonesian rupiah has fallen 18 per cent against sterling and a 483 per cent surge in currency sales in that 10-year period is a clear indication that holidaymakers are becoming increasingly aware of the value that comes from choosing destinations where sterling is strong and local prices are low.Easier flight access and cheap packages have also helped.

As a result, the Post Office has chosen Bali for its 2019 holiday hotlist⁴. Other value choices include Turkey and the cities of Bratislava and Porto, where local prices are among the lowest in Europe.The hotlist also includes Croatia and Iceland, whose currencies are among ten showing the greatest sales growth over 10 years.In the past decade Croatian kuna sales have risen 325 per cent, while those for the Icelandic krona have grown by 237 per cent⁵.It also believes they will benefit from being locations for the last series of A Game of Thrones.

Despite continuing speculation about the negative impact of BREXIT on the pound, the report found that 60 per cent of the Post Office’s top 40 currencies, including the euro, are currently weaker than at sterling’s low point in December 2008/January 2009 – with double digit percentage growth for the pound against 16 of those 40 currencies⁶.

Post Office Travel Money added three new destinations – Abu Dhabi, India (Delhi) and the Seychelles (Mahé) – to the Worldwide Holiday Costs Barometer this year.Delhi emerged as cheapest of the three at £104.29, while Abu Dhabi (£168.66) and Mahé (£182.89) were at least 60 per cent pricier and emerged as the two most expensive destinations in the survey.

ENDS

For more information, please contact:

Joanne Leahy, Post Office Press Office

07791 894469

Joanne.Leahy@postoffice.co.uk

Christine Ball CBPR

01798 874177 / 07976 285997cball@cballpr.co.uk

A full breakdown of findings from the Post Office Travel Money Holiday Money Report 2019 can be found in the accompanying brochure.

The Post Office is the UK’s leading provider of foreign currency, accounting for one-in-four of all foreign exchange transactions.Euros are available on demand at over 9,000 Post Office branches and US dollars at over 3,500 branches.Both currencies can also be ordered online at postoffice.co.uk for same day ‘click and collect’ at selected branches, for next day collection at any branch or for home delivery. 1,600 larger Post Office Branches stock 30 leading currencies while up to 70 currencies can be pre-ordered at over 11,500 branches or online at postoffice.co.uk/travel for next day branch or home delivery.

Notes to Editors:

¹ GfK’s Travel Insights+ service shows that bookings for April-December are up nine per cent year-on-year.

² Post Office Worldwide Holiday Costs Barometer found that prices had fallen compared with January 2018 in 19 of 39 destinations surveyed last year (NB: three destinations of 42 surveyed are new for 2019):

China Town, Singapore-21.5%

Rodney Bay, St Lucia-19.6%

Rio de Janeiro, Brazil-19.5%

Marmaris, Turkey-18.7%

Beijing, China-17.8%

Mombasa, Kenya-16.3%

Nice, France-13.7%

Sliema, Malta-9.0%

Cape Town, South Africa-8.6%

Cancun, Mexico-8.3%

Santiago, Chile-8.2%

Corfu, Greece-7.8%

Tobago-6.9%

Sunny Beach, Bulgaria-5.0%

Phuket, Thailand-4.3%

Costa del Sol, Spain-2.0%

Vancouver, Canada-1.9%

St James, Barbados-1.5%

Seoul, South Korea-0.9%

³ Post Office Worldwide Holiday Costs Barometer research (January 2019): see Holiday Money Report pages 5-6 and the attached full tables of costs for 42 destinations. The barometer was compiled with the help of national and regional tourist boards together with www.marmarisinfo.com and specialist tour operators Balkan Holidays (Bulgaria) 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 insect repellent – were selected as representative of the purchases UK tourists are most likely to make on a foreign holiday.

⁴ The Post Office Holiday Hotlist is spotlighted on pages 7-8 of the Holiday Money Report.

⁵ Full details of the 10-year value sales growth for destinations/currencies can be found on page 3 of the Holiday Money Report.

⁶ A review of sterling’s gains and losses over one and 10 years can be found on page 4 of the Holiday Money Report.