‘Far East looks a bargain’ as value of sterling surges

The Far East “looks a bargain this winter”, according to the Post Office, which found a surge in sterling’s value means holidaymakers’ money will go further in many long-haul hotspots.

The annual Post Office Travel Money Long-Haul Holiday Report found that Brits planning winter-sun holidays can expect to pay less than a year ago in more than 88% of destinations surveyed.

Destinations in the Far East look set to offer the best bargains, as they take five of the 10 places in a comparison of costs in 30 leading long-haul holiday resorts and cities.

The research was compiled by the Post Office from local prices provided by report partner Travelbag and tourist offices.

Vietnamese resort Hoi An (pictured) has retained its position as the cheapest destination for the second year running.

A drop in local prices and the falling value of its currency, the dong, combined to bring costs down by 19.2% since last autumn.

At £52.66, the barometer basket of 10 tourist staples – including a three-course evening meal for two and range of drinks – is more than 11% lower than its nearest rivals – Mombasa Beach, Kenya, and Cape Town, South Africa.

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The Kenyan shilling is currently worth a third less than a year ago against sterling, which means that while local prices have risen by around 8% in Mombasa Beach, the overall barometer total of £59.57 is almost 20% lower than in 2022.

As a result, Mombasa Beach has overtaken Cape Town to take the runner-up position in this year’s chart. Prices in third-placed Cape Town total £61.58, more than 8% less than a year ago.

Similarly, prices are down 9.8% in Bali (4th, £72.39), 7.7% in Tokyo, Japan (5th, £73.54), 3.7% in Phuket, Thailand (7th, £88.36) and 17.1% in Penang, Malaysia (9th, £90.11).

Delhi, India, (£79.53), surveyed for the first time in five years, is in sixth position.

Sharm el-Sheikh is included for the first time in a decade and takes eighth place with a barometer cost of £89.56 on the back of a 70% year-on-year fall in the value of the Egyptian pound against sterling.

Sri Lanka’s capital city, Colombo, (10th, £92.58) returns to the best value top 10 after a two-year gap due to political unrest in 2022.

Barbados and New York are the most expensive of the 30 destinations surveyed, although prices have fallen by over 26% in Bridgetown, Barbados, to £169.17 and 5.4% to £152.41 in New York.

Laura Plunkett, head of travel money at Post Office, which accounts for one in four UK foreign exchange transactions, said: “After a summer when we reported that holidaymakers would have to dig deeper in their pockets on European holidays because of rising inflation, our research found that local price rises have been relatively low in most long-haul resorts.

“As a result, the positive exchange rate means winter-sun tourists will see their pounds stretch further in the majority of destinations.”

There were increases in three destinations – Cancun, Mexico; Tamarindo, Costa Rica; and Punta Cana, Dominican Republic.

Holidaymakers visiting the US, Caribbean and Dubai will also see a boost to their spending power because of the recovery of sterling against the US dollar and the Caribbean and Middle East currencies that are pegged to it.

Lesley Rollo, managing director at Travelbag, commented: “Our customers have always been savvy about where to get the best value whilst on holiday, and we’re seeing this in our booking trends this year.

“Mirroring this report, the Far East has by far been our biggest booked region over the last 12 months with a 127% increase in bookings year on year.”

Picture of Hoi An, Vietnam, by Elizaveta Galitckaia/Shutterstock