Cash-strapped holidaymakers could lead to city breaks explosion

Eastern Europe’s emerging city break destinations could be set to benefit from the UK’s economic downturn, just as Barcelona, Prague and Dublin did after the stock market crash 20 years ago - according to a new report by Post Office Travel Services.

The report, which examines the growth of city breaks over the past two decades, concludes that demand for city breaks may explode in 2008 as it did after Black Monday in October 1987.

Cities like Krakow, Tallinn, Riga and Dubrovnik are among those predicted to grow in popularity this year – for many of the reasons that people flocked to Barcelona, Prague and Dublin in the late eighties and nineties, according to the Post Office.

Post Office head of travel Helen Warburton said: “It’s all about cost. After Black Monday many people had to cut back on expenditure and there was a strong growth trend in two or three night short breaks. It was much cheaper to go on two or more breaks during the year than to take a two week holiday. With a credit crunch widely forecast, UK holidaymakers may well follow the same route this year.”

“In the eighties there were two significant factors in the expansion of city breaks. The emergence of low cost carriers and a big increase in flights from regional airports brought many more cities within easy reach. With expanding services from a greater number of low cost carriers today, UK holidaymakers now have even more choice.”

When UK shares fell 26.4 per cent in a day on Black Monday, city breaks were in their infancy and Paris was the most significant player. It remains the most popular choice and leading operator Superbreak expects Eurostar’s terminal relocation to St. Pancras and Disneyland Paris’ high profile 15th birthday celebrations this year to keep demand strong.

But other cities that were popular 20 years ago – among them Vienna and Florence – have dropped down the ratings, according to the Post Office’s city breaks top ten tables for the past 15 years.

Short breaks to eurozone cities still dominate – taking eight of the top ten places - but the Post Office warns holidaymakers to be prepared for the pound in their pocket to buy less in these cities. Sterling has slipped by 11 per cent against the euro since last March. However visitors to Prague will feel the pinch even more, because the pound has fallen by 22 per cent against the Czech koruna. Only in New York – a new entrant to Superbreak’s cities top ten – will the pound stretch further – by five per cent.

Of the Eastern European cities, Budapest is likely to offer best value to UK visitors this year as its currency, the forint, has strengthened least - by eight per cent - against sterling. In Krakow, which has benefited from the biggest increase in the number of flights from UK regional airports, the pound will buy 19 per cent less than a year ago.

However Helen Warburton said that holidaymakers should not be deterred. “Costs in Eastern Europe are generally lower than in the western cities so the price of tourist items like drinks, meals and souvenirs should be less. And people planning a break in the eurozone can pick places like Lisbon and Berlin where the cost of living is cheaper.”