Strength of sterling helps prices in long haul hotspots plummet by up to 41 per cent
- Bali retains its best value rating for the third year running in the Post Office Travel Money Long Haul Holiday Report (www.postoffice.co.uk/longhaul)
- Price of meals, drinks and other tourist staples fall in half of the 33 destinations surveyed – by 41 per cent in Penang
- Tokyo has third cheapest tourist items: prices 50 per cent lower than two years ago
- Lower resort prices in Cancun make Mexico cheapest in the Americas after big increases hit Caribbean islands and USA
Bali has retained its position as the cheapest resort in Post Office Travel Money’s annual report on the long haul holiday sector for the third year running¹. With a 5.5 per cent price fall in the cost of 10 tourist staples in Kuta to £37.91, the Indonesian island was among 16 of 33 surveyed destinations to register year-on-year price falls in the Post Office Travel Money Long Haul Holiday Report ².
Prices researched for Post Office Travel Money by the long haul tailor-made holiday specialist Travelbag for the new report were for an evening meal for two with a bottle of wine, bottle of beer/lager, soft drink, glass of wine, cocktail, chocolate bar, mineral water, suncream and insect repellent. The strength of sterling, combined, in some cases, with lower resort prices have contributed to UK travellers’ money going further this autumn and winter.
Close on Bali’s heels, Cape Town (£41.58) remains second cheapest for the third consecutive year but a bigger price fall year-on-year of 10.9 per cent has helped the city narrow the gap.
While the price falls in Bali and Cape Town result from sterling exchange rate gains of well over 15 per cent, third-placed Tokyo (£51.81) has moved up from eighth position in the 2014 table because of a combination of the strong pound and local price cuts. When this year’s 21.5 per cent price reductions in the Japanese capital are added to the significant falls reported 12 months ago, costs for UK visitors have now dropped 50 per cent since 2013, making a destination previously thought expensive an increasingly affordable option.
This year’s biggest falls have been in Penang, where prices have plummeted 41.1 per cent year-on-year to £68.29. This takes the Malaysian island up to 10th place in the barometer table from 28th last year, when Post Office Travel Money reported big price rises. Increasing competition to attract back tourists after the difficult year experienced in 2014 may account for the big falls in local prices charged in Penang’s restaurants, bars and shops. These have compounded the benefit of sterling’s 28 per cent surge in value against the Malaysian ringgit.
In addition to Bali, Tokyo and Penang, three other Far Eastern destinations look set to offer good value. Although prices are up 6.2 per cent year-on-year to £58.31 in Phuket, the Thai resort has dropped just one place to sixth in the barometer table. Hoi An, Vietnam (£73.02) has retained 13th place with a 0.8 per cent drop in costs, while another fast-emerging Far East destination, Seoul in South Korea (£69.02), is just outside the top 10 at number 11.
Cancun returns to the top 10 in seventh place after a slump in the value of the Mexican peso. At £63.75, Cancun prices have plunged by over 11 per cent since last September to make Mexico cheapest in the Americas, followed by Costa Rica.
Although prices have risen 20 per cent in Tamarindo since last year, Costa Rica has maintained its top 10 position in eighth place with a barometer basket costing £67.41. Picked as one of its hotlist predictions in January’s Holiday Money Report, Post Office Travel Money sales of the Costa Rican colon have mushroomed by 46 per cent in 2015, making it the year’s fastest growing currency. With the introduction of direct Dreamliner flights from London this autumn, Costa Rica looks set to become a mainstream player in the long haul market.
However, elsewhere in the Americas, the falling value of sterling against the dollar has had a marked impact, not just on destinations in the USA but also in the Caribbean, whose currencies float with the dollar. To add to this, local prices have risen in most areas – by up to 23 per cent in the Caribbean (Jamaica, £105.56) and 30 per cent in the USA (Austin, £99.93).
As a result, Orlando, Florida (£70.12) was the only destination of 12 US and Caribbean ones surveyed to register a year-on-year fall in prices. A barometer drop of 7.5 per cent means the theme park favourite has moved up three places to 12th position in the table and is 42 per cent cheaper than Miami (£121.33), the most expensive US destination surveyed. Antigua (English Harbour) was highest-priced of six Caribbean islands. At £137.13, its barometer basket cost two-thirds more than in Tobago (£81.83), the most competitively-priced Caribbean destination.
Destinations ‘down under’ have traditionally been among the most expensive places for UK visitors. Now, thanks to a sterling surge that puts over 20 per cent more Australian and New Zealand dollars in the purse, the cost of goods has fallen heavily in both Darwin (£91.13 – down 16.8 per cent) and Auckland (£100.66 – down 24.3 per cent). As a result both have moved up the barometer table – Auckland to 24th place and Darwin to 20th position.
In their place the Middle Eastern trio of Dubai, Oman and Egypt join US and Caribbean resorts at the bottom of the Post Office Travel Money barometer table. Dubai was the most expensive destination surveyed at £167.10, while a rise of 15.2 per cent in Muscat has made Oman almost as pricey at £145.16. Although prices have fallen 8.5 per cent in Sharm El Sheikh to £107.32, this represents a rise of over 20 per cent over the past five years.
Andrew Brown of Post Office Travel Money said: “Price remains the big issue and so it is good news to see so many long haul destinations offering great value, even though the strength of sterling is the main reason for the low resort costs. Local prices have only fallen in eight resorts this year, while sterling has risen in value against the currencies for most destinations3. The trick is to do some holiday homework before booking and pick destinations where the cost of living is already low and where the strong pound is making prices even cheaper.”
There is evidence that UK holidaymakers are doing just that. Travelbag holiday bookings show that Bali and South Africa are benefiting from consumer awareness that exchange rates are in their favour and resort costs are low.
Anna Watt of Travelbag said: “Our customers are particularly keen on getting the best value for their holidays, from luxury beach getaways to city breaks or off the beaten track adventures. They look for both value in the holiday price itself, as well as costs when in the destination. Australia, New Zealand, South Africa, Mauritius and Mexico are in our top 15 bestselling destinations over the last 12 months, with Australia and New Zealand picking up as the exchange rate improves. Bali and South Africa in particular have seen a rise in popularity, with bookings up 22 and 26 per cent respectively year on year.”
Travelbag is currently offering flight and accommodation holiday packages this autumn to Bali from £639 per person, Cape Town from £589 per person and Japan from £599 per person. Flights and two weeks campervan hire in Australia in October costs from £999.4
Andrew Brown said: “In recent weeks sterling has been moving up in value against almost every long haul currency compared with earlier in the year so people planning long haul trips should monitor movements and purchase currency when the exchange rate is in their favour. 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. 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.Long haul holidaymakers can also carry cash on the Post Office Travel Money Card, a chip and PIN-enabled MasterCard accepted in over 28 million locations worldwide. In addition to the sterling, Swiss franc and euro cards, the Travel Money Card is also available in US dollars, Australian dollars, Canadian dollars, New Zealand dollars and South African rand.
More than 3,000 Post Offices are now open on a Sunday and many branches are also open early in the morning and late at night, so holidaymakers can plan their visit to suit them.
Holidaymakers can compare resort costs for destinations they are considering at www.postoffice.co.uk/longhaul.
Notes to Editors:
Details of prices and resorts surveyed can be found in the barometer 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 five of the six US destinations (excluding Orlando), which were 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 15 September 2015.
² Resort prices have fallen year-on-year in 16 of 32 destinations that were also surveyed for the 2014 Long Haul Report (based on total costs once the sterling exchange rate was applied to local prices). Comparisons are not available for Boston as the city did not appear in last year’s report. The biggest price falls were as follows:
1.Malaysia (Penang) -41.1%
2.Brazil (Rio de Janeiro) -28.6%
3.New Zealand (Auckland) -24.3%
4.Japan (Tokyo) -21.5%
5.Canada (Vancouver) -19.9%
6.Kenya (Mombasa) -19.3%
7.Australia (Darwin) -16.8%
8.Mexico (Cancun) -11.1%
9.South Africa (Cape Town) -10.9%
10.Egypt (Sharm El Sheikh) -8.5%
3Sterling has strengthened against 16 of 27 currencies for destinations featured in the Post Office Long Haul Report (2015 v 2014). The top ten gains were:
1.Brazilian real (+57.4%)
2.Malaysian ringgit (+28.0%)
3.New Zealand dollar (+23.1%)
4.Australian dollar (+21.0%)
5.Mexican peso (+20.1%)
6.South African rand (+16.8%)
7.Indonesian rupiah (+15.6%)
8.Canadian dollar (+14.0%)
9.Kenyan shilling (+12.7%)
10.Korean won (+8.5%)
4 Travelbag (0207 001 4112) is offering packages to destinations, where prices have fallen, as follows:
-Bali: 10 nights in November 2015 from £639 per person including flights from London Gatwick and B&B accommodation at the three-star Ibis Styles Benoa
-Cape Town: five nights in October 2015 from £589 per person including flights from London and room only accommodation at the Ritz Hotel Cap Town, Sea Point
-Tokyo, Japan: five nights in January 2016 from £599 per person including flights from London Gatwick and room only accommodation at the three-star Shiba Park Hotel. Book by 31 October
-Australia: Flights from London Heathrow on 30 September 2015 and 14 days Britz campervan rental from £999 per person
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