Favourable exchange rates are likely to prove game-changers when it comes to holiday choice in the year ahead, a new report out today (Friday) predicts.
Europe will be the best place for holiday value in resort in 2015 with the euro and other European currencies looking increasingly fragile against sterling, according to the ninth Post Office Travel Money Holiday Money Report.
The exception is Turkey where a 13% rise in the cost of eight typical tourist staples such as meals and drinks in Marmaris has largely reversed price falls reported a year ago.
Costs have fallen in two-thirds of the European countries surveyed – most dramatically by more than 19% in Crete to £41.74, which is in seventh place of 46 destinations.
European cities and resorts have fill eight of the top 10 best value places in the report’s Worldwide Holiday Costs Barometer.
Last year’s best value destination Bali has lost its title to the Czech capital Prague (£35.29), which registered the survey’s lowest price for a three-course evening meal for two with wine at £21.
Although Bali remains the best value long haul resort, a 21% increase in its barometer basket and the increasing power of the pound against European currencies explains why the Indonesian island (£38.09), has fallen to fifth position.
The Algarve in Portugal (£36.04) has retained its runner up place for the second consecutive year and remains Europe’s best value beach resort with prices more than a third lower than five years ago.
Falls of more than five per cent in both Sunny Beach, Bulgaria (£36.14) and the Costa del Sol (£36.80) mean these cost only a few pence more.
Long-haul destinations have scored both the biggest rises and falls in barometer costs. Price hikes of 66% in Muscat to £120.13 and 65% in Dubai to £144.50 make the two Gulf destinations the most expensive surveyed alongside New Zealand (£126.70) and Singapore (£149.65).
By contrast the basket of goods has dropped 37% in Costa Rica where resort costs have fallen sharply in Tamarindo to £54.51. The report predicts that the introduction of Boeing 787 Dreamliner flights by Thomson later in 2015 will boost demand for the country.
Resort prices have plunged 37% in Costa Rica to £54.51 and 24% in Mauritius to £68.30, bringing them among the 10 Post Office Travel Money ‘holiday hotspots’ for 2015. Others include Mexico, Croatia and Tobago, helped by falls in Air Passenger Duty and the resumption of Virgin Atlantic flights.
The eastern European cities of Budapest, Prague join the 2015 hotlist alongside the Lithuanian capital of Vilnius.
Andrew Brown of Post Office Travel Money said: “Holidaymakers travelling to Europe in the coming year can look forward to better value-for-money, although they should still do their homework to ensure they don’t miss out on the best deals.
“There is currently little difference in resort costs between the Algarve, Sunny Beach and the Costa del Sol, which are cheapest in Europe, but keep an eye on Crete and Cyprus where falls in the cost of eating out make these islands better value than ever before.”
He added: “When you look at the prices charged in Prague and Budapest compared with most of their competitors, it is hardly surprising that UK tourists are choosing to visit cities where they know they can holiday for less.
“A 23% increase in Czech koruna purchases and a huge 142% rise for the Hungarian forint over five years is the clearest possible evidence that holidaymakers are checking city costs before travel and going where the pound will best serve them.
“However, holidaymakers should keep a close eye on exchange rates before deciding on a destination to see where they will get the most for their money.
“Just a few months ago we were reporting a five year high against the US dollar but now the pound buys almost seven per cent fewer dollars than last January.
“Conversely, the pound is currently worth nearly six per cent more against the euro than a year ago and has kept at high levels for much of the past year. That could change because exchange rates are unpredictable.”