Sterling’s value in resort makes a big difference to a holiday experience, says Andrew Brown of Post Office Travel Money
Until very recently sterling has been surging against all major holiday currencies, making prices in overseas resorts significantly cheaper for UK holidaymakers.
However, while the pound remains strong against many currencies, it has started to drop in value against the US dollar and currencies such as the UAE dirham, East Caribbean dollar and Barbados dollar that float with it.
What’s more, as the winter-sun season gets under way, our latest Long Haul Report of 34 destinations reveals evidence that local prices have risen in almost two-thirds of resorts.
This adds up to a sharply polarised picture for UK holidaymakers planning winter-sun breaks. On the one hand there are great savings to be made in some of the most popular destinations. On the other, holidaymakers who make the wrong destination choice could see much-increased resort prices.
The trick for cost-conscious clients is to do plenty of holiday homework before booking. Agents can play an important part in helping by advising clients to factor in resort costs as well as the holiday price when making a choice because these can make a big difference to the overall holiday budget.
Encourage customers to watch exchange-rate movements. While sterling may be falling against the US dollar, it is increasing in value against the Australian and New Zealand dollars, Indonesian rupiah and South African rand.
The weakness of the rupiah and the rand help explain why Bali and Cape Town have retained their places as the cheapest long-haul resorts. In Bali, the weak rupiah and falling local prices mean meals, drinks and other tourist staples cost less than a third of those in the most expensive destinations such as Oman, Singapore and Dubai.
Sri Lanka, long regarded as good value both for holiday packages and resort costs, is another destination to consider. Falling prices in resorts such as Negombo have made the country the third-cheapest in our survey.
Elsewhere, the power of the pound has made destinations previously considered expensive better value, among them Japan and Mauritius.
This year’s biggest bargain is Tamarindo in Costa Rica where the cost of tourist staples has almost halved in price since 2013.
There have been hefty price rises in fast-emerging destinations such as Vietnam where, in Hoi An, our barometer costs have mushroomed by almost 40% in a year. Some of the biggest rises have been in Middle Eastern resorts. In Dubai tourists’ costs have risen 66%. In Muscat, research showed a 50% increase and in Sharm el-Sheikh we found costs 90% higher than in 2012.
● Check resort costs at postoffice.co.uk/longhaul2014