When planning trips, consumers are increasingly looking at currency exchange rates to make the most of their travel budget, says chief executive of eDreams ODIGEO, Dana Dunne
We spend a significant amount of time planning and saving for our next holiday. What time of year? What destination should we pick? How long should we go for? All typical questions that are discussed when booking a trip away. But increasingly, travellers are looking for options that offer them the best value for money, both at the time of booking and while they are away, ensuring their holiday budget goes as far as possible.
In the UK we can see how the pound’s performance against other currencies has influenced travel patterns. In the second quarter of 2019, the number of visits to the UK from North America increased by 17% to 1.6 million – a clear example of American tourists capitalising on the good performance of the dollar against the pound.
‘Travellers are getting savvier’
More Americans weren’t just travelling to the UK though, they were spending more when they arrived, with a 26% year-on-year increase in spending.
The travel sector has repeatedly proven its resilience, with traveller volumes increasing year after year despite global events creating economic and political uncertainty. We know that people will always travel, but now they are becoming savvier about where they go.
For example, the strong performance of the Euro and dollar against the pound in recent years, has seen UK travellers look to alternative destinations outside of Europe and North America where there are favourable exchange rates and they can secure value for money.
More:Holiday costs fall as sterling strengthens and prices drop
According to the ONS, visits to Europe from the UK decreased by 15.9 million between April and June 2019. But Britons were just looking further afield, where the local currency was more favourable to the pound, reflected in the 2.6 million person increase in journeys to countries outside of Europe and North America.
The variation in travellers to Europe in April and June 2019 coincides with the UK’s original Brexit departure date and could reflect a degree of uncertainty on the part of consumers over their future visa and passport requirements.
‘Business optimism will spike’
These statistics are reflective of our own booking data, which shows that in 2016 prior to the EU referendum vote, 86% of UK travellers were booking holidays to Europe, in the same period in 2019 78% of bookings were to Europe, with the remainder booking trips to further away destinations where they can maximise their budgets.
The latest general election result in the UK will see business optimism spike, and with a majority government for the first time in a decade greater clarity on the UK’s future relationship with the EU will begin to crystallise.
In reality, people are going to continue travelling for work and leisure, consumers are just becoming increasingly smart about when and where they book based on wider macroeconomic influences.