Holiday Euro Summer 2008:
Inflation eating away at the holiday euro – Price increases higher
- Many popular holiday destinations suffering from significantly higher inflation
- Strength of the euro having a positive impact in England, the USA and some overseas destinations
- According to holiday euro ranking for the guests at the UEFA EURO 2008™, Swiss will profit the most
"The most popular holiday destinations among Austrians are struggling with even higher price increases than those seen in Austria," says Stefan Bruckbauer, deputy chief economist at Bank Austria, summarising the latest calculation of the holiday euro. Overall, the holiday euro is worth roughly 1 per cent less in the summer of 2008 than it was a year ago. Among the top five holiday destinations, only Germany has enjoyed lower inflation than Austria in the last twelve months. Croatia experienced slight appreciation, leading to a 4 per cent decline in the value of the holiday euro there.
The holiday euro continues to be worth the most in Turkey, where high inflation has been offset by depreciation. This is followed by the USA and then by Croatia. "For €100, travellers will get goods and services worth €137 in the USA. That’s 12 per cent more than last year," continues Bruckbauer. In fourth place among the most popular holiday destinations is Great Britain, where visitors will now receive substantially more for their money than they did a year ago. The country that has experienced the biggest loss this summer is Hungary, where the holiday euro is worth roughly 6 per cent less than it was a year ago due to significantly higher inflation and appreciation.
Among the most popular destinations, travellers will receive only slightly less for their money in Italy than in Austria. Tourists will still receive less for their holiday euro in Switzerland, where, as a result of appreciation, its value has decreased again in comparison to the previous year.
Among overseas destinations, the holiday euro has increased in value particularly intensely in Mexico, South Africa and Hong Kong. "Although most overseas destinations are struggling with inflation rates which, in some cases, are significantly higher than in Austria, a few countries, including Mexico, South Africa and Hong Kong, have experienced extremely strong depreciation and, as a result, the holiday euro rose considerably in value in some cases," says Bruckbauer. Depreciation was also higher than the difference in inflation rates compared to Austrian in New Zealand and a few Asian countries, such as Thailand and China. There are also a few overseas destinations where the strength of the euro has had a negative impact. Thus the holiday euro is worth less in Brazil and Egypt than it was a year ago.
The holiday euro for our guests at the UEFA EURO 2008™
As a special service in light of the European football championship, the economists at Bank Austria have reversed the calculations and worked out how much the holiday euro is worth for our guests in Austria in comparison to their home countries. "Due to our high standard of living, only the Swiss, the Swedes and the Italians will be able to afford more in Austria with their holiday euros than they can at home," says Bruckbauer, adding, "For the Swiss, it is actually more affordable to watch the EURO 2008 in Austria." He continues: "For many visitors to the EURO 2008, however, their stay in Austria will be more expensive than at home." The French, Germans and Dutch, but also the Spanish and Portuguese, will discover that price levels in Austria are similar to those in their home countries. For the Greeks and the Czechs, the visit to the EURO 2008 will be 10 to 20 per cent more expensive than at home. The Russians, Romanians and Turks will get drastically less for their holiday euros at the European championship than at home.
In conclusion, the economists at Bank Austria would like to point out that these figures are average values that could differ for individual regions (such as the central region of London, for example). The price levels refer to the average price of goods and services in the individual countries; the prices for individual products could differ substantially (especially for tourists). Therefore, the changes in value are listed for holiday destinations rather than the values themselves. Furthermore, the fact that the price levels are so much more affordable in some holiday destinations than in Austria is primarily due to the high income level in Austria. If the price level were lower in Austria, the income level would also be lower – many of us would most likely not be able to afford to go on holiday.
charts (PDF; 98 KB)
Enquiries: Bank Austria Economics and Market Analysis
Stefan Bruckbauer, Tel.: +43 (0) 50505 - 41951
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