HOLIDAYMAKERS ARE taking advantage of the highest exchange rate for the euro in seven years as they plot their summer getaways.
Sales of the currency are up by 98 per cent over the past three months compared to the same time last year, reports Asda Money, the supermarket chain’s finance arm.
Over the past few months the pound has been at its highest rate against the euro since 2008 and financial analysts reported a further surge in the value of the pound following the outcome of the General Election on Friday.
Independent travel agents said the best way to take advantage of the current strength of the pound over the euro was to avoid booking all-inclusive European holidays.
Michael Langford, proprietor of Michael Langford Travel in Harrogate, said: “The way you can really gain is if you book bed and breakfast accommodation and go half board because the money you spend on top of that will go further, giving you greater choice to do things, whereas if you go all-inclusive the prices were fixed a year ago.
“Secondly, buy your euros now, particularly if you are going on holiday later in the year. Generally speaking, the pound is very strong so both of these rules also apply if you are going to the Americas, the Far East or South Africa.”
Business is booming for Steven Manning, managing director of Top Choice Holidays, Meanwood, Leeds, who said: “We are busier than ever at this moment. Clients are moving away from the internet due to publicity regards scams and failures, and we are also busy because of exchange rates.
“When a person can get a 30 per cent increase in the amount of euros compared to last year then the cost of a holiday is reduced dramatically. Even at the point of booking holidays are less expensive than anticipated and in addition the spending money factor is considerable.
“In the past all-inclusive holidays to places like Turkey have been popular as clients knew exactly what they were spending but now with the euro rate being so good people are returning to traditional destinations like Spain, Portugal and France or Italy.”
An Asda Money analysis of exchange rates shows how the strength of the euro against the pound has fluctuated since the euro was introduced 16 years ago.
The exchange rate has never repeated the highs of a year after the euro was used in mainland Europe, when British holidaymakers buying £500 worth of euros would have been €130 better off than today. According to Asda Money, this extra cash could buy two additional nights in a 3-star hotel in Croatia, two child tickets for a day in Disneyland Park and Walt Disney studios in France or a two-day family trip to Port Adventura Theme Park in Spain for a family-of-three.
At the other end of the spectrum however, those who jetted off five years ago would have suffered a rock bottom rate of exchange with €136 fewer euros in their pocket compared to today.
At present, holidaymakers can get €690 for £500, still somewhat less than €820 back in 2000 and €720 ten years ago, but the comparisons with more recent years are kinder - five years ago, £500 would yield €554.
Asda Money is one of numerous firms offering pre-paid currency cards to allow people to exchange currency while rates are high and save the benefits for when they do go on holiday.
Karen Harkin, senior product manager of travel money at Asda, said: “We know that for many people planning their summer getaway it’s difficult to know when to buy travel money as rates change so rapidly and this makes a real difference to how much families can spend on holiday.
“For those holidaymakers looking to lock in great rates it makes sense to purchase a pre-paid currency card such as the Asda Money Currency Card. It also allows customers to load currency onto their card over time, rather than buying it all in the run up to their holiday. They can use it in the same way as their credit or debit card on their trip without incurring any fees.”
Is now the time to buy?
The financial future of the crisis-hit Greek economy will continue to have a bearing on the strength of the pound against the euro but the result of the UK General Election has boosted confidence in the pound, said Dr Iain Clacher, associate professor at Leeds University Business School.
“A number of factors are driving the situation, largely instability in the European economy but the decisive election has given investors much more confidence in the UK economy.
“I would buy euros now. Considering past prices, to get around €1.40 to the pound isn’t a bad deal. That’s not to say it won’t get better but it is a relatively strong position.”