Croatia beats off late euro surge to score summer sun success
As the new school term marks the end of a summer holiday season marred by travel company failures and strike threats, Croatia has emerged as the winning choice for holidaymakers travelling to Europe. It overtook neighbour Bulgaria in Post Office Travel Money’s currency bestsellers chart for June-August¹ and is one of the 10 Fastest Growing Currencies for the second year running.
With six per cent more Croatian kuna to spend thanks to sterling’s recovery since summer 2009, the Post Office research suggests that more UK families chose the Balkan state for their holiday. Croatia moved up to eighth place in the Post Office bestsellers chart for June-August with a currency sales growth of four per cent (rising to 10 per cent in August). This built on last year’s 22 per cent increase.
By contrast, Balkan rival Bulgaria dropped to ninth place in the summer bestsellers league table with a sales fall of nine per cent compared with last year - even though its currency, the lev, lost 6.4 per cent of its value against sterling.
Sweden and Denmark were the summer’s most surprising success. Sweden was the highest placed European country at number five in the Fastest Growing Currencies chart with a year on year increase in kroner sales of seven per cent. This accelerated to 25 per cent in August, when sales of the Danish kroner also rose by 19 per cent.
But, despite a late small recovery in August when sales grew one per cent, the euro lost ground. Six per cent less currency was purchased than in summer 2009, although the euro remains the UK’s bestselling currency with over 75 per cent of all sales².
Sarah Munro, Post Office Head of Travel Money, said: "In spite of the improving exchange rate and lower resort costs, it seems that some holidaymakers were still reluctant to travel to the eurozone, which helped to boost demand elsewhere in Europe. Croatia has been gaining ground as a result for some time but other successes - like the strong Scandinavian performance - came as more of a surprise."
As the rain clouds gathered over ‘Staycation UK’ during August, the Post Office research suggests that this was the most popular month for trips overseas, helping to boost the overall position for summer 2010.
Continuing the trend first identified in 2009, long haul destinations again took eight of the top ten places in the Fastest Growing Currency summer chart. Led by the Brazilian real (+27 per cent) and the Dominican Republic peso oro (+25 per cent), this year’s chart was dominated by Latin America and the Caribbean Islands.
With the Indonesian rupiah taking third place in the Post Office summer growth table, Bali seems to have been the main beneficiary of a dip in fortunes for Thailand after riots made the UK’s top Far East destination a no-go area last spring. Although tour operators are reporting a recovery for winter 2010³, Post Office sales for the summer period show an 18 per cent drop for the Thai baht compared with a 22 per cent increase for the Indonesian rupiah, which increased to 35 per cent in August.
China also looks to be having another good year. The Chinese yuan is the only currency to feature in the Fastest Growing Currencies top ten for three consecutive years after registering a five per cent year on year increase for summer 2010. This growth rose to 26 per cent in August, a performance that coincides with the launch of Chinese yuan Travellers Cheques, available exclusively from the Post Office.
Ironically the summer’s biggest loser has been South Africa where the Football World Cup appears to have dampened demand for travel to the country. South African rand sales at the Post Office dropped like a stone by 26 per cent. Concerns about post-World Cup price hikes for tourists visiting during South Africa’s low season, combined with the poor exchange rate - sterling buys 10 per cent less rand than a year ago and 20 per cent less than in 2008 may account for the unexpected drop in demand.
Sarah Munro said: "There was a clear dividing line between winners and losers in the race for holiday business this summer. Croatia led a small band of European countries that held their own, but the big successes were destinations further afield.
"Looking ahead, the August upturn in currency sales suggests a recovering market, which bodes well for the winter sun season. After a difficult year, Thailand and others who lost out this year will want to regain ground. However, while there may be great deals, holidaymakers should avoid wasting cash by changing money for a low rate at the airport. They can also cut costs abroad by using a credit card like the Post Office card that offers 0 per cent commission on purchases overseas."