Price falls in many resorts negate weakness of the pound, says Andrew Brown of Post Office Travel Money
If you are worried customers will be put off travelling abroad because of sterling’s fall in value, things may not be quite as bad as you think. The latest Post Office Worldwide Holiday Costs Barometer shows the pound could stretch further than expected, provided holidaymakers pick a destination where in-resort costs have stayed low.
Prices for meals, drinks and other tourist staples – in euros, dollars and other currencies – have either fallen or stayed on a par with 2016 in 40% of the 44 destinations surveyed. These include favourites such as the Algarve and Costa del Sol, as well as top resorts in Italy, Greece, Bulgaria, Cyprus and Malta.
Further afield, prices have also fallen in Singapore, Barbados and Mauritius. For example, the price of a three-course meal with wine is down 14% on last January in Mauritius, which equates to only 2.5% extra to pay once the fall in the value of the pound is taken into account.
Advise customers to choose one of these destinations to reduce the impact of the weak pound. In the Algarve, the cheapest destination surveyed, holidaymakers will pay just £4 more than a year ago for the barometer items.
Bless my Sol
Sunny Beach, in Bulgaria, is only fractionally more expensive than the Algarve and also benefits from a small fall in prices. But a bigger decrease in the Costa del Sol has enabled the region to close the gap on the Black Sea resort.
A collapse in the peso’s value means Mexico is now one of the few countries where sterling will stretch further than a year ago. The weak peso and stable prices in Cancun have helped the Mexican hotspot register one of the smallest barometer increases, making it the third-cheapest long-haul resort.
It is also worth explaining to customers that if you compare today’s prices with five years ago, they are now lower in many of the most popular resorts.
Med down
Prices in the Algarve are 27% lower than five years ago, when the pound was weaker than now. The same applies in Greece and Italy. Prices have fallen more than 10% since 2012 in Corfu and Sorrento – in the latter, the cost of eating out is 7% lower than last year, making it an attractive option for UK tourists.
In the eastern Mediterranean, Paphos, in Cyprus, and the Maltese town of Sliema rank among the best-value destinations. Prices in both resorts are 5% lower than in 2012.
But holidaymakers would be wise to do their homework. While prices are down on last January in two out of five resorts, they have risen significantly in others, including in Jumeirah Beach in Dubai, Bali and Mombasa. Prices in the Caribbean and Far East are also significantly higher. Resorts in Thailand, Vietnam, Antigua, the Dominican Republic, Jamaica and Saint Lucia are up to 50% more expensive than in 2012.
However, prices in Tokyo are 17% cheaper than five years ago. With the cheaper package prices and air fares now available to Japan, this once aspirational destination could be one of 2017’s most affordable options.