Currency Values and Your Holiday Choice

After several months of deep concern, including a time when the UK Pound sterling rate almost levelled down to parity with the Euro rate, the prospects for holidays in Euro Zone destinations for UK travellers seemed bleak indeed. Traditionally-popular destinations such as Greece, Spain and even France have started to look very expensive. And with the steep dive in the value of the Pound against the US Dollar, many worldwide destinations, such good value when the Pound was worth 2 whole US Dollars, had suddenly become much less attractive.

But this rise in the value of the Pound could still be seen as good news, but also possibly not such good news.

What, for example, are the prospects for UK domestic tourism? The pound having risen to above 1.60 against the US dollar for the first time since November 2008, and looks to be continuing this upward trend. This of course is a good thing for UK holidaymakers planning their annual holiday abroad, but is unfortunate for trade exporters, and unfortunate for the UK domestic tourism business which has been looking forward to a highly lucrative summer. Certainly for the home-based UK traveller, the additional prospect of a sunny long-range weather forecast after two consecutive dismal summers has been a big factor which has driven this optimism.

Meantime of course, the exchange rate was promising to make the UK favourable once again to the US holidaymaker after several years when prices worked against them. Naturally, the rate is unlikely to reach the 2 dollar threshold again this summer, so the year-on-year value for incoming tourism remains good - but not as good as some had hoped.

With any recession, the choice of holiday destination becomes much more price-focussed, of course. There are a large number of families who will always insist that a holiday should comprise guaranteed sunshine, a definite change of culture, and a complete change from the familiarity of home. For these holidaymakers, the decreased value of their holiday Pound means a more adventurous look beyond the Euro Zone and into destinations such as Turkey - now massively popular - and Egypt, which is a country which has worked hard on its resort infrastructure in recent years, to complement the perennial attractions of it ancient monuments and history. Also on the radar these days is Morocco, another country where the infrastructure has improved amazingly in recent years and which now has a proliferation of cheap flights to various cities including Agadir and Marrakech. The efforts by the tourism offices of such countries to attract new visitors are being rewarded as their promotional messages fall on the fertile imaginations of otherwise cash-strapped holidaymakers. Thus the currency values spell good news for them.

On balance, the strengthening of the Pound is a concern for the UK holiday business, but trends for the industry this summer are definitely up. On the other hand, there is every likelihood that further increases will trigger some late booking activity for traditional Euro Zone countries - but only if the sun refuses to shine as has been promised. But meantime, the longer-term future of tourism to non-Euro zone countries will have benefited greatly, such countries having found new customers this year in the face of changing currency values.