Winter sun set to shine on Far East holiday resorts

A surge in sterling’s value against long haul currencies means Britons planning winter sun holidays can expect to pay less than a year ago in over 88 per cent of destinations surveyed for the annual Post Office Travel Money Long Haul Holiday Report¹. Led by Vietnam, destinations in the Far East look set to offer the best bargains. They take five of the 10 ten places in the comparison of costs in 30 leading long haul holiday resorts and cities² compiled by the UK’s leading foreign exchange provider from local prices researched by report partner the long haul tailor-made holiday specialist Travelbag and tourist offices.

Top Vietnamese resort Hoi An has retained its position as the cheapest destination for the second year running. A drop in local prices and the falling value of its currency, the dong, have combined to bring costs down by 19.2 per cent since last autumn. At £52.66, the barometer basket of 10 tourist staples³, including a three-course evening meal for two and range of drinks, is over 11 per cent lower than its nearest rivals – Mombasa Beach, Kenya and Cape Town, South Africa.

The positive role played by sterling is particularly clear in Kenya. The Kenyan shilling is currently worth a third less than a year ago against sterling, which means that while local prices have risen by around eight per cent in Mombasa Beach, the overall barometer total of £59.57 is almost 20 per cent lower than in 2022. As a result, Mombasa Beach has overtaken Cape Town to take the runner-up position in this year’s chart. Prices in third-placed Cape Town total £61.58, over eight per cent less than a year ago.

Similarly, prices are down 9.8 per cent in Bali (4^th, £72.39), 7.7 per cent in Tokyo, Japan (5^th, £73.54), 3.7 per cent in Phuket, Thailand (7^th, £88.36) and 17.1 per cent in Penang, Malaysia (9^th, £90.11). They join Vietnam in the top 10, indicating that the Far East is likely to be a great value choice for bargain hunters this winter.

There are three new entrants to the Post Office barometer top 10. Delhi, India (£79.53), surveyed for the first time in five years, is the highest placed of these in sixth position. Sharm el-Sheikh is included for the first time in a decade and takes eighth place with a barometer cost of £89.56 on the back of a 70 per cent year-on-year fall in the value of the Egyptian pound against sterling. Sri Lanka’s capital city, Colombo, (10^th, £92.58) returns to the best value top 10 after a two year gap due to political unrest in 2022.

Barbados and New York are the most expensive of the 30 destinations surveyed, although prices have fallen by over 26 per cent in Bridgetown, Barbados to £169.17 and 5.4 per cent to £152.41 in New York.

Inflation has not been a significant factor in long haul destinations as it was in Europe during the summer when prices for UK visitors soared despite the strong pound. When combined with relatively small local price rises, the strengthening pound actually means that barometer costs have dropped year-on-year in 23 of the 26 (88.5 per cent) long haul destinations surveyed for the report a year ago. The biggest falls have been in Santiago, Chile (down 43.9 per cent to £104.07, 14^th) and St Johns, Antigua (down 34.6 per cent to £112.38, 16^th).

Laura Plunkett, Head of Travel Money at Post Office, which accounts for one-in-four UK foreign exchange transactions, said: “After a summer when we reported that holidaymakers would have to dig deeper in their pockets on European holidays because of rising inflation, our research found that local price rises have been relatively low in most long haul resorts. As a result, the positive exchange rate means winter sun tourists will see their pounds stretch further in the majority of destinations. However, while prices may be lower once they get to their destination, we advise holidaymakers to consider the whole picture and factor in the package price before booking.”

Despite the falls in most long haul destinations, the Post Office report found increased prices in three resorts. They have risen by 7.1 per cent in Cancun, Mexico to £125.78 (20^th) and 5.8 per cent in Tamarindo, Costa Rica to £143.04 (27^th), mostly because these are the only long haul holiday destinations whose currencies have strengthened against sterling in the past year. Prices have also risen by 18 per cent in Punta Cana, Dominican Republic (£133.23, 26^th) – the largest rise by far.

Similarly, sterling’s rise in value means that with the exception of the Dominican Republic, visitors can expect to get more for their money in the Caribbean islands. Here too, prices vary quite significantly. Montego Bay, Jamaica is the lowest priced of seven Caribbean resorts surveyed (12^th, £100.96), 40 per cent cheaper than Bridgetown, Barbados.

Holidaymakers visiting the USA, Caribbean and Dubai will also see a boost to their spending power because of the recovery of sterling against the US dollar and the Caribbean and Middle East currencies that are pegged to it.

Across the Atlantic, prices have fallen in Florida and New York as a result of a 10.8 per cent year-on-year recovery in the value of the UK pound against the US dollar. However, there is a marked 57 per cent differential between the prices that visitors can expect to pay for meals, drinks and other tourist staples in New York (29^th, £152.41, down 5.4 per cent) compared with Orlando (11^th, £97.36, down 8.7 per cent).

The same differential applies in the United Arab Emirates. Barometer prices in Dubai (22^nd, £126.07) are over 14 per cent lower than in Ras al-Khaimah (28^th, £147.01), surveyed for the first time this year, even though both Emirates use the UAE dirham.

Laura Plunkett said: “By doing their homework to see where the pound is worth more and where resort costs are low, holidaymakers can save themselves a lot of money – even within the same country or region. Check resort prices at www.postoffice.co.uk/longhaul and change sufficient travel cash to cover the cost of meals, drinks and other tourist staples. By changing more than £500, holidaymakers can get a better exchange rate at Post Office bureaux and on our website – and avoid the poor rate they would get by changing money at the airport.”

The latest intelligence from Travelbag supports the idea that holidaymakers are taking note of exchange rate movements and resort costs before choosing a destination.

Lesley Rollo, Managing Director, Travelbag, commented: “Our customers have always been savvy about where to get the best value whilst on holiday, and we’re seeing this in our booking trends this year. Mirroring this report, the Far East has by far been our biggest booked region over the last 12 months with a 127% increase in bookings Year on Year.”

The full results of the 2023 Post Office Travel Money Long Haul Holiday Report can be viewed online at www.postoffice.co.uk/longhaul and a breakdown of costs is given in the attached barometer tables.

Footnotes

¹ Barometer price falls in 23 of 26 destinations compared with 2022:

1. Chile: Santiago -43.9%

2. Antigua: St John’s -34.6%

3. Barbados: Bridgetown -26.1%

4. Tobago: Scarborough -22.3%

5. Kenya: Mombasa Beach -19.8%

6. Vietnam: Hoi An -19.2%

7. Malaysia: Penang -17.1%

8. St Lucia: Rodney Bay -11.8%

9. Indonesia: Bali -9.8%

10. Peru: Lima -9.6%

11. Australia: Darwin -9.1%

12. Canada: Vancouver -9.0%

13. USA: Orlando, Florida -8.7%

14. South Africa: Cape Town -8.2%

15. Japan: Tokyo -7.7%

16. New Zealand: Auckland -7.3%

17. USA: New York -5.4%

18. Jamaica: Montego Bay -4.6%

19. Thailand: Phuket -3.7%

20. Dubai: Jumeirah Beach -3.4%

21. Grenada: St George’s -1.5%

22. Brazil: Rio de Janeiro -0.1%

23. Mauritius: Grand Baie -0.1%

² The Post Office Long Haul Holiday Report barometer table is compiled from a combination of data supplied by the long haul specialist Travelbag cross-referenced with prices provided by national or regional tourist offices of participating countries. Resorts featured are chosen as representative of the prices that UK holidaymakers will generally find in the country/destination. Online checks were made to authenticate these prices. Exchange rates used are Post Office internet rates for exchange of £500-£999.

³ The 10 items surveyed are: a cup of filter coffee, 330ml bottle of local lager, 330 ml bottle of Coca-Cola, 175ml glass of wine, cocktail, small chocolate bar, 1.5 litre bottle of supermarket mineral water, 200ml bottle of suncream, 50ml tube/bottle of insect repellent, three-course evening meal for two adults including a bottle of house wine.