Pressure On Pounds In The Pocket Means Holidaymakers May Head Back To Europe
Spain is cheapest in Europe: prices down 40 per cent in five years
Sri Lanka, Mexico and Thailand are best value for long haul tourists
Argentina and Vietnam head Post Office emerging destinations hotlist as currency demand explodes (www.postoffice.co.uk/holidaycosts2012)
Europe’s holiday destinations could be 2012′s big winners as tighter travel budgets and a strengthening sterling exchange rate against European currencies attract families back to resorts in the Med. Although Sri Lanka takes the top spot for value in its sixth annual Holiday Money Report, Post Office Travel Money research suggests that holiday choice will be based strictly on affordability rather than aspiration(1). Despite low resort costs, higher airfares will make it harder for long haul hotspots to compete with the Costas.
Sri Lanka was the cheapest by far of 40 destinations surveyed by the Post Office for the report’s Worldwide Holiday Costs Barometer(2), rising from fifth place in 2011. At £27.95 for eight items, including dinner for two with wine, a year-on-year fall of 31 per cent made the fast-growing family favourite 26 per cent cheaper than runner up Spain.
However, resort prices in the Costa del Sol (£37.72) are now 40 per cent lower than five years ago, when Post Office Travel Money conducted its first barometer, and the cheaper cost of travel to Spain will make it a compelling choice for bargain hunters. So does the rising value of the UK pound: up 6.4 per cent against the euro in the past three months(3).
The Post Office Holiday Money Report found that sterling is stronger against 29 of its major currencies than a year ago(4), which should help deflect the pain of higher package prices and rising resort costs in two-thirds of destinations featured in the barometer. The biggest rises were recorded in Kenya (+52 per cent, £69.70) and Portugal (+39 per cent, £45.58) – the latter falling from top spot in 2011 to seventh place this year.
Putting the Portugal price rise into context, resort costs in Italy are 95 per cent higher (£89.03, up 21 per cent) while Corfu in Greece (£71.73) is 57 per cent more expensive than the Algarve. Cyprus was the only eurozone destination of seven surveyed to show a clear fall in resort costs – down eight per cent (£53.19).
Elsewhere in the eastern Med, Turkey, once regarded as one of Europe’s cheapest destinations, could only achieve 17th place in the Worldwide Holiday Costs Barometer table – making it 60 per cent more expensive than Spain.
Sarah Munro, Post Office Head of Travel Money, said: “Given that sterling is worth around 20 per cent more than a year ago against the Turkish lira, we expected to see a lower barometer cost for Turkey, especially as the country had a disappointing 2011. However, we were surprised to find that local costs have actually risen by 21 per cent and it is only the strong sterling exchange rate that is masking that increase.”
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