The strength of sterling looks set to play a pivotal role in holiday destination choice according to the Holiday Money Report 2016 from Post Office Travel Money.
The tenth annual report reveals that three-quarters of the Post Office 40 bestselling currencies are weaker against sterling than a year ago and holidaymakers will benefit from the marked impact this is having on tourist prices in many of the world’s most popular resorts.
Research for the Worldwide Holiday Costs Barometer published in the report reveals that the cost of eight tourist staples, including meals and drinks, has fallen in 23 of the 44 key worldwide destinations surveyed.
The power of the pound is the main reason for this, although local price cuts are a contributory factor in 13 destinations.
Post Office Travel Money reports falls of 15-20% in ten destinations, and a 31% drop in Penang, Malaysia (£64.05).
Portugal’s Algarve (£29.32) tops the barometer chart as the cheapest destination for UK tourists for the first time in five years. With prices down more than 18% year-on-year, the Algarve is one of eight European destinations that dominate the best value top ten for the second year running. As a result of the value available to UK tourists, particularly for meals and drinks, Portugal features in the Post Office Travel Money list of ten hotspots for 2016.
Registering a similar 18% price fall, the Bulgarian resort of Sunny Beach (£29.49) is a close runner up, just 17 pence behind the Algarve.
By contrast, some local shop and bar prices have risen in the Costa del Sol (£35.61) so the gap between fourth-placed Spain and the two chart-toppers has widened to more than £6 from just £1 last year.
Prices in Cape Town (£34.55) are down 20%, one of only two long-haul destinations to make the leading ten destinations. As a result of the great strides made by sterling against the rand in recent months, the city has powered past Bali to make it lowest-priced of 32 long-haul destinations surveyed and third cheapest overall. With sterling now worth 28% more than a year ago, equating to £111 extra cash on a £500 currency purchase, Post Office Travel Money has chosen South Africa for its 2016 hotlist.
Bali (£40.35) retains its top ten position, but local prices are on the rise. Although sterling’s continuing strength against the Indonesian rupiah cushions the blow, barometer costs have risen nearly 6%, resulting in Bali’s fall to eighth in the table.
There have also been price increases in Prague (£40.19), last year’s best value destination. Rising meal costs have made the Czech capital almost 14% more expensive year-on-year and resulted in its fall to seventh position, just below city break rival Budapest (£39.40). Prices are on par with 12 months ago in Hungary’s capital but its weak currency means that Budapest is almost 4% cheaper than a year ago. These factors, together with its popularity for celebration breaks, make Budapest another hotlist tip for 2016.
Three Eastern Med resorts – Marmaris (£38.83), Paphos (£41.58) and Corfu (£43.42) – fill the remaining top ten places. Corfu is a new entry, rising to tenth place from 14th last year on the strength of lower meal prices, which have helped to make the Greek island more than 19% cheaper than a year ago.
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