The pound is worth less than €1 at airport bureaux de change, hitting holidaymakers hard, sending the cost of a skiing break into the stratosphere and shrinking pension incomes for expats in Spain, but making Britain a bargain basement destination for tourists.
Bureaux de change
At Southend airport on Friday morning, Moneycorp was offering holidaymakers €0.97 for each £1, while at Heathrow and Birmingham airport, the best on offer was just a smidgen over parity with the euro, at €1.004. In November 2015, the peak market rate for sterling was €1.425 to the pound; although holidaymakers would not have enjoyed such a rate, spending abroad is now costing Britons 15-20% more than before the Brexit vote.
Pensioners abroad
About one-third of the 300,000 British people living in Spain are in receipt of a UK state pension and have effectively had a large pay cut since the EU referendum. The £119.30 a week basic state pension was worth as much as €170 a week last year, but is now worth €133 a week.
John Hayward, a financial adviser for British residents on the Costa Blanca, based in Jávea, said: “It’s not all doom and gloom. The pound is down a lot, but the value of their investments have gone up as the stock market has soared since Brexit. You are not hearing too much moaning down at the bowls club. It’s still much better than 2009, when both sterling and the stock market were down.”
However, he said it was inevitable that sterling’s plunge would have derailed plans for some retirees, with the cost of buying a property in Spain jumping significantly in sterling terms since the Brexit vote.
Skiing holidays
Even before the flash crash on Friday, the price of skiing holidays, especially to the US, had become fantastically expensive. A week’s ski pass in the Rocky Mountains resort of Vail now costs British visitors £609, with ski hire another £200.
Diane Palumbo of holiday operator SkiWorld said there had been a remarkable surge in canny skiers buying their lift passes and package holidays for the 2016-17 season ahead of the EU referendum.
Since the decline in the pound, there has been a rise in skiers opting for all-inclusive chalet holidays where costs are controlled, Palumbo said, although there is little evidence yet that British people are abandoning traditionally popular resorts such as Val d’Isère in favour of cheaper breaks in Bulgaria.
“The volumes are still there, but over the longer term, we will see people looking at prices and saying ‘maybe we will stay away from skiing for a year’. But the truth is that the ski market dropped 25% in 2008 and hasn’t recovered a lot since then, and what you have now are the people who really love skiing and won’t be put off by the currency,” she said.
Tourists to Britain
Prices on Oxford Street in London and Princes Street in Edinburgh are so low that foreigners, particularly wealthy Chinese shoppers, are flocking to the UK to pick up bargains.
This week is China’s “golden week” holiday season, and online travel site Ctrip is predicting a 40-60% increase in trips to Britain. Goods in the UK are now about 20% cheaper for Chinese buyers than a year ago and more than half of Ctrip’s routes to the UK were booked up one month ahead of golden week.
Britain has become the number one destination for golden week travellers to western Europe and has even elbowed aside Australia, traditionally more popular because of its proximity.
Shares in luxury goods brands have been among the biggest beneficiaries of the Brexit vote, with Burberry soaring from £10.40 a share just before the EU referendum on 23 June to nearly £15, adding about £2bn to the market value of the company.
