Buoyant forex sales show no sign of drop in demand for foreign travel

Buoyant forex sales show no sign of drop in demand for foreign travel

There remains a sustained appetite for overseas travel despite a dramatic slump in the value of the pound, a new report claims.

Foreign currency sales are outperforming 2015 when sterling was far stronger, according to Post Office Travel Money.

Analysis of sales reveals healthy growth for 17 of its 20 best selling currencies – led by the euro and US dollar.

Euro sales accelerated during September to show a 14% year-on-year increase over the same period in 2015, which comes on the back of strong summer of sales for the single currency.

Despite the weakening pound, US dollar sales are up 16% for 2016 as a whole – with no sign of a drop-off in demand.

The latest Post Office Holiday Money Index also shows double-digit percentage increases for all of the 20 fastest growing currencies.

The biggest year-on-year growth has been for the Indonesian rupiah (up 50%), suggesting that winter trips to Bali will be popular this winter, and for the Costa Rican colon (up 44%), where demand is being boosted by the launch of direct flights from the UK.

The index also reveals that sales of the Hungarian forint have risen 17% year-on-year – and this growth increased to 21% in September, suggesting strong demand for Budapest city breaks.

Sales of the Norwegian krone showed a 20% increase last month compared with September 2015, rising from 12% for the year as a whole.

Andrew Brown, of Post Office Travel Money, said: “Our latest currency sales make it clear that the weaker pound has not dented UK holidaymakers’ appetite for travel so far. There is strong evidence that holidaymakers are planning travel abroad, even to those countries whose currencies have strengthened most against sterling.

“For example, we have seen very strong growth in demand for the Indonesian rupiah and yet sterling has fallen 24% in value over the past year.
“Similarly, sales of the Japanese yen have soared by 19% while sterling is down by 31% since last year. This is because the low cost of living in Tokyo and Bali makes these destinations great value for UK visitors even though the exchange rate has fallen.”
He added: “There is evidence too that some canny travellers are choosing resorts where sterling has fallen in value least.
“Sales of the Mexican peso are continuing to rise as they have done for the past decade, while Costa Rica looks to be one of the year’s big successes as new flights bring the destination within easy reach.”
Post Office Travel Money analysed rate movements over six and 12 months and found that while all currencies have strengthened to some extent, the two currencies that have strengthened least in the past six months are the Swedish kronor (-6.8%) and Mexican peso (-8%).
Over 12 months the Mexican peso has gained just 8.9% on the pound, making resorts like Cancun and the Riviera Maya a good deal for bargain-hunters. Looked at over two years, sterling is 8% stronger against the peso.
Other destinations that feature in the list of currencies that have strengthened least against sterling over the past six months include Malaysia (Malaysian ringgit -8.1%), Jamaica (Jamaican dollar -9.8%), Costa Rica (Costa Rican colon -11%) and countries belonging to the single currency (euro -11.5%).


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