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27 July 2009
Holiday Money Monitor - July 2009
First Rate Exchange Services is the UK’s leading wholesaler of foreign exchange services, and the provider behind the Post Office’s market leading service. In its latest holiday money trends report The Post Office has revealed some interesting purchasing trends for the first half of 2009, and an insight into which initiatives, from massive reductions in air fares from both scheduled airlines and low cost carriers to the reductions in prices by cheaper European city hotel beds¹, are working to encourage international travel from the UK.
Long haul is the new short haul: Led by South Africa and Kenya, eight out of the top ten fastest growing currencies in June are long haul destinations.
Holidaymakers, it seems, are responding to the flood of great value long haul packages available for departure in July and August. In June long haul destinations took eight of the ten top places in the Post Office’s growth table and the story was much the same for the first six months of the year.
South Africa was top player in June with year on year growth of 176 per cent, attributable in part to the British Lions tour. Overall, however, Kenya has been 2009’s star performer, recovering from last year’s riots to record a 171 per cent growth in currency sales for the year to date (109 per cent in June alone).
Sales of the Indonesian rupiah have also been strong, making this the Post Office’s third fastest growing currency. Its success can be attributed largely to the popularity of Bali, which, according to long haul specialist Hayes & Jarvis, is having its best season for a decade.
Also in the Far East, China sustained the interest generated by last year’s Olympic Games to take fifth place in the January-June growth table with yuan sales up 13 per cent (38 per cent for June). More significantly, Thailand pulled back after a bad start to the year, when demand was dampened by political unrest. In June sales of the Thai baht grew year on year by 35 per cent, a response to the keenly-priced family package offers available for the school holidays.
The Turkish lira has, for the first time, moved up to third position in the Post Office’s list of best selling currencies.
Turkey looks to be Europe’s success story in a year when the strength of the euro has put traditional favourites like Spain, France and Greece under pressure. It features in the Post Office top ten fastest growing currencies for the first six months of 2009, as well as in the leading ten for June.
Sales of Turkish lira are up 43 per cent in the year to date, compared with the same period in 2008, and this growth accelerated to 53 per cent in June. Despite sterling’s rally, Turkey remains one of the relatively few holiday spots where the UK pound will buy more than a year ago (+8.5 per cent). In the past month sterling has been at its strongest all year and is currently around 18 per cent stronger than in early January.
After a poor start to the year, euro and US dollar currency sales have picked up and sold strongly in June.
The green shoots of recovery may at last be appearing for the eurozone. Sterling has recovered 8.6 per cent of its value against the euro since the turn of the year and sales of the currency have finally begun to pull back. The Post Office had its best week of the year for the week ending 8th July, when sales strengthened by 70 per cent against those for the first week of May.
US dollar sales have also begun to rally. For June as a whole Post Office dollar sales were nine per cent up on a year ago – even though the pound is worth over 20 per cent less than it was then.
Eastern Europe is continuing to struggle. Save for the Croatian kuna, currency sales are well down on last year across the board. Even Bulgaria, best value in the Post Office Holiday Costs Barometer, has seen a downturn in sales of its lev.
Although sterling buys around 6.6 per cent less kuna than a year ago, Croatia bucked the negative eastern European trend with growth of 11 per cent for January-June that gathered pace to reach 19 per cent in June. Ironically the biggest losers this year are destinations like Poland, Hungary, and the Czech Republic, even though sterling is worth significantly more in these countries than 12 months ago².
Bulgaria, said to be Europe’s bargain basement, has also seen a downturn in demand with 21 per cent less Bulgarian lev purchased in the first six months of 2009.
Gordon Gourlay, Managing Director, First Rate Exchange Services, said: “Foreign currency retailers, have seen an upturn in currency sales in recent weeks, an indication that UK holidaymakers are taking advantage of the great deals available.
“There’s been significant growth in currency sales for destinations such as Thailand, Kenya and Egypt where long haul package deals are proving particularly attractive to UK tourists looking for bargain breaks. Looking closer to home Turkey is the rising star. In fact the Post Office has reported that its sales of Turkish lira have overtaken the Australian dollar, now being third only to the euro and US dollar.
“For UK holidaymakers visiting more traditional holiday destinations across the eurozone the good news is that the sterling euro exchange rate has improved by almost nine per cent since the end of 2008. With many resorts cutting prices in a bid to attract tourists many UK travellers will be pleasantly surprised just how far their pounds will go this summer.”
POST OFFICE FASTEST GROWING CURRENCIES (Jan-Jun 2009)
| RANKING | CURRENCY | PERCENTAGE INCREASE |
| 1 | Kenyan shilling | +171% |
| 2 | Turkish lira | +43% |
| 3 | Indonesian rupiah | +38% |
| 4 | South African rand | +16% |
| 5 | Chinese yuan | +13% |
| 6 | East Caribbean dollar | +13% |
| 7 | Croatian kuna | +11% |
| 8 | Jamican dollar | +5% |
| 9 | Romanian leu | +4% |
| 10 | Thai bhat | +2% |
POST OFFICE FASTEST GROWING CURRENCIES (June 2009)
| RANKING | CURRENCY | PERCENTAGE INCREASE |
| 1 | South African rand | +176% |
| 2 | Kenyan shilling | +109% |
| 3 | Indonesian rupiah | +77% |
| 4 | Turkish lira | +53% |
| 5 | Chinese yuan | +38% |
| 6 | Thai bhat | +35% |
| 7 | Hong Kong dollar | +34% |
| 8 | Malaysian ringgit | +26% |
| 9 | Egyptian pound | +21% |
| 10 | Croatian kuna | +19% |
POST OFFICE TOP SELLING CURRENCIES (Jan-Jun 2009)
| RANKING | CURRENCY |
| 1 | Euro |
| 2 | US dollar |
| 3 | Turkish lira |
| 4 | Australian dollar |
| 5 | Canadian dollar |
| 6 | Eygptian pound |
| 7 | Swiss franc |
| 8 | South African rand |
| 9 | New Zealand dollar |
| 10 | UAE dirham |
Note to Editors:
1Price comparison website Trivago surveyed 50 cities and found that hotel prices in a majority of European cities have fallen by an average of seven per cent in July 2009 compared with 12 months ago. Long haul tour operator Hayes & Jarvis reported that price cuts by hotels and airlines have made lead prices for many destinations comparable to short haul ones.
2Year on year comparisons for 13 July 2009 versus 2008: sterling has gained 26.6 per cent against the Polish zloty, 12.2 per cent against the Hungarian forint and four per cent against the Czech koruna.
About First Rate Foreign Exchange Services:
First Rate is the UK’s leading provider of foreign currency services supplying over 11,500 retail outlets with a foreign currency service. It is the UK’s biggest foreign currency notes supplier and Europe’s major provider of traveller’s cheques and in the top five globally. First Rate sources currency through its associate business unit Bank of Ireland First Currency Services, one of the world’s leading wholesale currency operations.
First Rate can provide UK retailers and businesses with the following foreign currency services:
- Travel Money Online – a service enabling the ordering of foreign currency notes and traveller’s cheques securely via First Rate’s white label internet application
- Bulk provision of currency for currency retailers
- End-to-end consumer order processing – totally outsourced, white label currency solutions for phone, internet or retail outlet order placement
To find out more visit www.firstrate.co.uk.
For further information, please contact:
Four Countries Communications
Ruth Barker
Tel: 0207 749 9219
Mobile: 07814 571128
Email: ruth@fourcountries.co.uk
Bank of Ireland UK Financial Services
Sandra Grandison
Tel: 0203 201 6509
Mobile: 07912 298013
Email: sandra.grandison@boiuk.com
First Rate Exchange Services Ltd is registered in the UK and Supervised by HM Revenue & Customs for Money Service Business (MSB): License number 12133160. First Rate is a joint venture between The Governor and Company of the Bank of Ireland (Registered in Ireland and passported into the UK for regulatory purposes) and the Post Office® Ltd. The Bank of Ireland is authorised by the Irish Financial Regulator and the Financial Services Authority for the conduct of business in the UK. Bank of Ireland First Currency Services is a division of The Governor and Company of the Bank of Ireland.