After more than a year of steady decline, the pound hit a 37-year low on September 5, hitting 1.445 against the US dollar. This is the weakest since March 1985. And that too was a brief aberration. The current slide looks like a much more unstoppable erosion of our spending power, caused in part by a weak economy and in part by inflation growing significantly faster than in other major economies.
So what does this mean for our vacation plans? Of course, traveling to the United States and countries that link their currencies to the US dollar, such as Barbados and several islands in the eastern Caribbean, has become much more expensive. Compared to a year ago, your spending power has dropped from a rate of £ 1 = US $ 1.38 to $ 1.15 today. This means that the pound is worth 17% less than last September.
The strong dollar also exerts upward pressure on airfares, because the price of aviation fuel is in US dollars, so any airline based outside the US has to pay more every time it refuel. its aircraft.
The good news is that those fuel costs still don’t seem to be filtered through airfares – at least this fall you can still find plenty of good-value flights to major continental destinations. And your budget will be helped by the fact that the euro is suffering almost as much as the pound against other currencies as European countries face even more intractable problems with energy costs than we do. This time last year, the euro was trading around 1.17 to the pound, now it is at 1.16
However, many tourist destinations, including Thailand, South America and Brazil, which in previous crises have tended to offer good value for money relative to the pound, don’t seem like such good bets at the moment. The pound was worth 45 Thai baht a year ago, now it buys 42. It is roughly on the same level as the South African rand over the same period, but has dropped from 7.20 to just under six against the Brazilian real. (Remember these are all money market fares, tourists have to pay more to buy foreign currency, even if the relative change in value is roughly the same).
Among other currencies, the pound has dropped nearly 10% against the Indian rupee, 9% against the Australian dollar and more than 13% against the Canadian dollar since last September.
There is however one major destination that continues to stand out for British travelers looking for some last-minute sun or a city break: Turkey. In September 2021, a pound would buy you around 11.5 lire. Now the rate is almost 21.
The collapse of the lira is mainly caused by rampant inflation (it is currently almost 80 percent), but Turkey still offers extraordinarily good value for money. According to the post office’s latest Holiday Money Report, released earlier this year, the Turkish resort of Marmaris offered the lowest prices of 36 popular destinations surveyed. His comparative shopping cart cost a total of £ 26.13, compared to, for example, £ 44 in the Algarve, £ 56.44 in Cyprus and £ 59.56 on the Costa del Sol. Head to Nice or Puglia and you should pay about four times more than in Marmaris, where a cup of coffee in a bar costs 59p, a beer in a bar costs £ 1.54 and the bill for a three-course meal for two – complete with a bottle of wine – comes in at £ 16.
You have to get there, of course, but a quick search for dates later this month found me round-trip fares from Luton to Bodrum with EasyJet for £ 161 and just over £ 200 from Stansted to Istanbul with Pegasus. And once you arrive, the whole vacation may actually be cheaper than staying at home.