Return Of The Awaycation As Pound's Power Makes 45 Holiday Hotspots Cheaper

23rd May 2022

Inflation might mean the pound in your pocket is wilting at home, but it now goes further in 45 popular holiday destinations than it did before the pandemic.

Brits heading abroad this summer will get a better exchange rate on four out of five of the most in-demand foreign currencies, new analysis by No1 Currency reveals.

Steadfast sterling has soared in value against the currencies of holiday hotspots Turkey, Sri Lanka, Argentina, Costa Rica and Egypt.

British travellers now enjoy a better exchange rate in 45 of the most popular foreign holiday destinations than they did before the pandemic, according to new analysis by the travel money specialist No1 Currency.

With many Britons planning their first foreign holiday since the pandemic struck two years ago, researchers compared the exchange rates seen on the eve of UK's first lockdown with those of today — and found that the pound is now worth more against four out of five (79%) of the 57 most in-demand currencies.

Sterling has doubled in value against the currencies of holiday hotspots including Turkey, Sri Lanka and Argentina since lockdown restrictions first grounded flights and closed borders in March 2020.

After two years in which foreign travel was either banned or tightly restricted, millions of Britons are again free to enjoy an ‘awaycation' abroad rather than limiting themselves to a UK staycation. In March, the Government scrapped locator forms and ended testing requirements for passengers entering the UK. Airlines and travel companies now report being desperate to recruit more staff as customer demand surges.

While runaway inflation is making the cost of living - including the cost of UK holiday accommodation - soar at home, a seismic shift in foreign exchange rates has boosted the pound's purchasing power in several other countries.

The pound's relative strength is greatest in Turkey, an enduring favourite of British sunseekers thanks to its spectacular coastline, great food and warm Mediterranean climate. President Erdogan's unconventional monetary policy has led the Turkish lira to lose more than half its value against the pound since the eve of the pandemic, making a holiday in Turkey even more of a bargain than it was before.

Meanwhile, for those willing to travel further, the pristine, palm-fringed beaches of Sri Lanka are twice as cheap as they were at the beginning of the pandemic. The island, which enjoys warm weather all year round thanks to its proximity to the Equator, bristles with World Heritage sites and is on many adventurous travellers' bucket lists.

In fact the Sri Lankan rupee has depreciated 18% against the pound in the past two months alone, meaning British tourists can indulge in luxury hotels and high-end food for a fraction of what they'd cost in the UK.

The third placed country on the list is Argentina, home of the tango, cowboys and reputedly the best steak in the world. The grand boulevards of Buenos Aires and the untouched wilderness of Patagonia, coupled with a weak currency, have long made the South American country a place to enjoy luxury for less.

The Argentinian peso has depreciated 50% against the pound since the pandemic began, but has been falling for years. A decade ago British visitors would get less than seven pesos to the pound; now they can get more than 140 — a twenty-fold increase.

But it's not just faraway destinations where Britons can afford to splash out this year. The pound has made considerable gains too in more traditional hotspots like the Eurozone (9%) and the United States (7%).

This year a family buying €2000 for a fortnight’s holiday in Spain or France will spend around £150 less than they would have done before the pandemic. And £1000 exchanged into dollars will buy you about $90 more than last year.

The analysis reveals that only a small minority of currencies have strengthened against the pound, and most of them only marginally. Norway, Australia and Mexico currently offer the poorest value compared with before the lockdown.

But despite the pound falling 12% against the Mexican peso, demand from British travellers for Mexico’s currency has strengthened, propelling the peso into the top 10 most-requested currencies at No1 Currency’s national network of bureaux de change for the first time.

Simon Phillips, Managing Director of No1 Currency, comments: "Finally some good news for anyone hoping to get away this summer. While soaring inflation is driving up the cost of living - and holidaying - in Britain, favourable exchange rates mean many of those heading abroad may get a pleasant surprise when they pick up their travel money.

"Our analysis shows that compared to pre-pandemic times, the pound in your pocket now goes further in the vast majority of the countries typically visited by British tourists.

"In the two most popular foreign destinations, France and Spain, sterling is now worth 9% more than it was before the first lockdown. Travellers venturing further afield will find their spending money goes even further, with Turkey, Sri Lanka and Egypt all offering exceptional value.

"After two years in which staycations became the norm, many people have got out of the habit of foreign travel. If this is you, don’t forget to shop around for the best exchange rate when you buy your travel money, and never leave it until you get to the airport.

“And remember that in many countries, cash is still king. You can be sure cash will be accepted everywhere, and taking local currency rather than relying on your card ensures you won’t face card charges and makes it easier to budget."

Note
Exchange rates quoted are mid-market rates. Unless stated otherwise, percentage change is the difference in rate between 22nd March 2020 (the eve of the UK’s first lockdown) and 20th May 2022.