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Falling pound fails to dent appetite for foreign travel, sales figures suggest

Published 22/10/2016

Post Office Travel Money said it has seen 46% growth in currencies sold online during this month so far, compared with the same period in October 2015
Post Office Travel Money said it has seen 46% growth in currencies sold online during this month so far, compared with the same period in October 2015

Households' appetite for foreign travel has not been dented so far by the recent falls in the value of the pound, sales figures suggest.

Despite the poorer exchange rates generally available to travellers heading out from the UK, Post Office Travel Money said it has seen 46% growth in currencies sold online during this month so far, compared with the same period in October 2015.

The Post Office, which accounts for one in four UK travel money transactions, said sales of the euro accelerated during September, to show a 14% year-on-year increase compared with the same period in 2015.

And, despite the weakening pound, US dollar sales were up 16% for 2016 as a whole, with "no sign" of a drop-off in demand, the Post Office said.

The figures, released as many families head off for a half term break or start booking their winter getaways, show the euro is the Post Office's best-selling currency, with the US dollar in second place.

Andrew Brown, the Post Office's head of 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."

Mr Brown said the low cost of living in Tokyo and Bali makes these destinations good value for UK visitors, even though the exchange rate has fallen.

He continued: "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."

Looking at places where holidaymakers may get better value for their pound, Post Office Travel Money said that while all the currencies it analysed had strengthened to some extent in recent months, the two currencies that have strengthened least in the past six months are the Swedish kronor and the Mexican peso.

Other currencies that have strengthened the least against sterling include the Malaysian ringgit, the Jamaican dollar and the Costa Rican colon.

Looking at where the pound has lost the most ground against other currencies, the Post Office said the Brazilian real and the Russian ruble had made particularly strong gains in recent months.

The Icelandic krona has also made particularly strong gains against the pound recently - although it is among the Post Office's fastest-growing currencies in terms of sales. Sales of the Icelandic krona were up by 18% between January and September compared with a year earlier.

And despite the falls in the pound, UK tourists heading abroad may still find they are better off than a couple of years ago.

The Post Office said the Russian ruble, for example, is still 20% weaker against sterling than it was in 2014, while the Brazilian real is worth around 1% less against sterling than two years ago.

Press Association

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