Purchasing power of the euro in various holiday destinations for Austrians in summer 2010:
Value of the "Holiday€uro" particularly low in summer 2010
- Reason: weaker euro and significant price increases in many countries
- Purchasing power of the "Holiday€uro" in 2010 lower than in 2009 in almost all countries
- Holidays more expensive especially in Turkey and overseas countries including South Africa
"This year the purchasing power of the euro is particularly low for Austrians spending their summer holidays outside Austria," says Stefan Bruckbauer, Chief Economist of Bank Austria, commenting on recent calculations of what the euro is worth in popular holiday destinations. The euro has depreciated against almost all other currencies and prices have risen more strongly in many regions. The average value of the euro in countries where Austrians like to go for their summer holidays is 3 per cent below the summer 2009 level.
A comparison with the previous year shows that the euro is weaker, especially in some overseas countries. "In overseas holiday destinations, the euro is worth 16 per cent less than a year ago," says Stefan Bruckbauer. "While the decline in South America has been particularly strong, it has been less pronounced in Asia and Africa." In South Africa, currency appreciation and higher price increases combined to reduce the purchasing power of the euro in the country hosting the World Cup by 25 per cent compared with the previous year. Nevertheless, the value of the "Holiday€uro" in most overseas destinations remains higher than in Europe or in Austria. This continues to apply to South Africa, too.
Among the major countries where Austrians spend their holidays, the purchasing power of the euro in Turkey declined by a particularly strong 20 per cent compared with summer 2009. This reflects the Turkish currency’s appreciation against the euro as well as a stronger price increase than in Austria: the inflation rate in Turkey was close to 10 per cent. Among Austrians’ preferred holiday destinations in summer 2010, the purchasing power of the euro is highest in Hungary, followed by Croatia, with Turkey in third place. Austrian holidaymakers will find that in the US, too, the value of the euro has fallen significantly, by 13 per cent, in summer 2010; but at EUR 108 its purchasing power is still slightly higher than in Austria. The same applies to the United Kingdom. Among the most popular holiday destinations, the "Holiday€uro" has only risen in Croatia, Germany and Portugal in summer 2010, but the modest increase of about 1 per cent is due to slightly lower inflation.
In the European countries which are less heavily frequented by holidaymakers, the euro continues to be worth significantly more in Romania, Bulgaria and Poland than in Austria. Other countries where the purchasing power of the euro is higher than in Austria are the Czech Republic and Slovakia, though it has declined slightly compared with the previous year. The strongest decrease of the value of the euro in the holiday destinations covered by the survey has been seen in Brazil.
Bank Austria’s economists draw attention to the fact that the data indicated in this context are average figures and that figures for specific regions (such as London as a central region) may differ. Price levels relate to average goods and services in the various countries, while prices for specific products (especially for tourists) may differ significantly from the average levels. For this reason, even for distant holiday destinations, the survey does not indicate absolute levels but only their changes. Moreover, the fact that prices in some holiday destinations are much lower than in Austria is mainly due to the high income level in Austria. If prices in Austria were lower, incomes would be lower, too – and as a result, many people could not afford to go on holiday.
charts (PDF; 78 KB)
For further inquiries: Bank Austria Economics and Market Analysis Austria
Stefan Bruckbauer, Tel. +43 (0) 50505 - 41951