As demand for international holiday travel returns to pre-Covid levels, the city of Cape Town was ranked the world’s best-value hotspot – thanks to a weaker rand in 2023.
This is according to the United Kingdom Post Office Travel Money’s Holiday Travel Report 2023, which ranked over 40 popular destinations based on currency demand, exchange rates, and travel costs.
“Demand for holidays abroad is close to pre-pandemic levels, according to tour operators, travel agents and airlines who have reported a boom in bookings,” the report said.
Despite the cost of living pressures affecting many countries worldwide, the report noted that Britons are prepared to forgo other lifestyle expenditures to afford a holiday abroad, and many will dip into their savings to fund the trip.
The first indicator of where these holidaymakers will travel is shown in the UK post office’s sales of holiday currencies, as well as the pound’s strength against the destination countries.
According to the report, stand-out destinations include New Zealand and Japan – which re-opened to overseas visitors in the second half of 2022 – and there are also clear signs that South Africa will be a popular choice.
Holidaymakers have been quick to return to New Zealand. Currency sales have mushroomed by over 8,000% compared with the early months of 2022, while the pound is rising in value against the New Zealand dollar and is worth 3.6% more year-on-year.
Pent-up demand for travel to Japan is also evident, as yen sales are 84% higher in January and February than in the period immediately before the 2020 Covid-19 lockdown.
However, the report noted that the pound has only gained 1.9% against the Yen.
Post Office currency sales for the rand also saw a notable increase, having surged 95% year-on-year, with the pound gaining 15.7% against the rand in March – a clear indication of holiday intent, said the report.
World’s best-value holiday destination
However, the report also noted that the costs of living and travel within the destination country are another major factor impacting UK travellers’ decision on a destination.
To determine the best destinations for bargain travellers, the report offered its Worldwide Holiday Costs Barometer.
This ranked 40 destinations according to the cost of a representative basket of eight items UK tourists are likely to purchase, including:
- A three-course meal for two with wine;
- A cup of coffee;
- A bottle of local beer;
- A can of cola;
- A glass of wine;
- A bottle of still water;
- Suncream; and
- Insect repellent.
Boosted by a fall in the value of the South African rand and keen pricing in restaurants and bars, Cape Town emerges as the best value in the survey of 40 destinations, up from fourth place a year ago.
The report added that at £51 (R1,147) for the barometer basket, prices are down 8.4% compared to 2022.
Despite further falls in the value of the Turkish lira, Marmaris has dropped from the top spot to runner-up in this year’s barometer, said the report.
Prices have more than doubled since last year to just below £58 in Marmaris due to inflationary pressures and a 5% rise in the minimum wage required in bars and restaurants.
In third place is Sunny Beach, Bulgaria, only 71p more expensive than Marmaris, but prices have also risen steeply by 20%. Mombasa in Kenya ranks fourth from seventh in 2022, with a basket cost of £59 (R1,327) thanks to Resort costs declining by 3.4%.
Portugal’s Algarve is again the cheapest Eurozone destination of nine surveyed in fifth place, but prices have risen by a third to £60 (R1,350).
Making up the rest of the top 10 are Hoi An, Vietnam (6th); Kuta, Bali (7th); Tokyo, Japan (8th); Colombo, Sri Lanka (9th); and Sharm el-Sheikh, Egypt (10th).
The infographic below shows the top 20 best- and worst-value holiday destinations and the breakdown of the basket costs for the top 10 best-value destinations, as outlined by the report.
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