Press release - 25 February 2023 07:00

Red Sea resorts may be 2023’s bargain choice after the Egyptian pound crashed against sterling at a time when other holiday favourites have seen their currencies surge in value

A dramatic fall in the value of the Egyptian pound could make Sharm el-Sheikh and other Red Sea resorts a bargain choice for Britons looking to holiday abroad in 2023 but beat the squeeze on their spending power caused by spiralling living costs, according to Post Office Travel Money analysis.

In its first Holiday Money Index of 2023, Post Office analysis of exchange rate movements has revealed that visitors to Egypt will get almost 73 per cent more than a year ago for their pounds – the equivalent of over £210 extra on a £500 currency transaction. This means that Britons visiting Sharm el-Sheikh will pay around £48 for a three-course meal for two with a bottle of wine, compared with more than twice that amount in Antigua (£100) or Barbados (£105).

Yet, the most striking trend to emerge from Post Office analysis of sales for the past year is that the currencies showing greatest growth compared with the pre-Covid period (February 2019-January 2020) are those for Caribbean and Latin-American countries – despite year-on-year falls of over 11 per cent in sterling’s value. Led by the East Caribbean dollar, where sales rose 137 per cent, these currencies take the top seven places in the Post Office’s 10 Fastest Growing Currencies for the 12 months to January 2023. This is part of a pattern of growth noted over the past three years.

Ed Dutton, Portfolio Director, Financial Services at Post Office said: “The fairest measure of demand is to compare currency sales now with the busy period before the Covid-19 pandemic. Sales of Caribbean and Latin-American currencies were particularly strong then, so it is encouraging that they are even more buoyant now. However, sterling has fallen in value against many of these currencies so holidaymakers should factor this into their holiday budgeting. A destination like Sharm el-Sheikh may prove cheaper because of the Egyptian pound’s steep fall in value against sterling.”

The Post Office Exchange Rate Monitor reveals that the biggest year-on-year sterling falls have been against the Costa Rican colon (-22 per cent), Mexican peso (-19 per cent) and Jamaican dollar (-13 per cent). Just 10 of the Post Office’s 30 leading currencies have seen year-on-year falls in their value against sterling. Aside from the sharp falls in value for the Egyptian pound, the Turkish lira has continued to tumble and is worth 25.3 per cent less year-on-year against sterling.

Recent months have seen varying fortunes for sterling. Post Office analysis of exchange rates now compared with three and six months ago reveals an unwelcome dip in sterling’s value against many currencies. It is now five per cent weaker than last August against the Euro and has dropped 9.5 per cent against the Hungarian forint, adding to the cost of a city break in Budapest.

However, Britons considering holidays in Africa will get more for their pounds than last August – five per cent extra in Kenya and almost 10 per cent more in South Africa. Both countries already rate among the best value destinations in Post Office cost comparison barometers so the weakness of their currencies spells good news for holidaymakers.

Although sterling has slipped in value against some of the most popular holiday currencies recently, the latest intelligence suggests the appetite for trips abroad remains resilient. Tour operators¹ say bookings are rising steeply and currency sales analysis from Post Office Travel Money, which accounts for one-in-four UK foreign exchange transactions, confirms the upward trend.

The Post Office’s top two currencies, the Euro and US dollar, made year-on-year sales gains of 66 per cent and 38 per cent respectively last month. At the same time, annual purchases of both currencies kept pace with those in the 12 months preceding the outbreak of Covid-19, when sales were strong. Significantly, the healthy year-on-year sales growth in January extends to 18 of the Post Office’s top 20 bestsellers – some of which were returning from lockdowns².

Trips ‘down under’ look set to be popular in the coming year. The New Zealand dollar has returned to the Post Office top 10 bestselling currencies table in eighth place, indicating that holidaymakers have been swift to travel to a destination only recently re-opened to international visitors. Demand for Australian dollars is also returning. Now third in the bestsellers list, purchases of the Australian currency rose by 373 per cent compared with January 2022.

The Turkish lira has risen from seventh to fourth place in the bestsellers table. Sales grew 16 per cent in the last 12 months compared with the year before Covid-19 and rose 61 per cent year-on-year in January. At the same time, the lira continued to fall against sterling last year and is now over 180 per cent weaker than in March 2020. This means visitors will receive the equivalent of over £321 more in liras on a £500 transaction than in 2020 – an attractive incentive for British tourists.

The outlook also looks bright for the Thai baht, which has moved up the bestsellers top 10 to seventh place. January sales rose 455 per cent compared with a year ago and are 16 per cent higher than in January 2020 before Covid-19 took hold.

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.

Ends

Notes to Editors:

¹ Comments by TUI, Travel Republic and other leading tour operators and travel agents reported in national media in February.

² January 2023 sales gains/losses for Post Office top 20 currencies compared with January 2022