A strengthening pound has contributed to higher Eurozone holiday bookings, which are up 167 per cent compared to this time last year according to data released by the foreign exchange specialist Fexco Corporate Payments.
Between January and April, UK-based travel companies spent 167 per cent more on Eurozone bookings than they did during the same period in 2018. Spending on US destinations increased, too, by 67 per cent.
While spending on US bookings is up by two thirds on 2018 levels, it is still a fifth lower than it was before the Brexit referendum. By contrast, spending on Eurozone destinations has increased by 598 per cent over the past three years.
While volatile exchange rates and fragile consumer confidence have put the travel industry under pressure, Fexco’s findings come as official statistics show Britons’ total spending on foreign travel is rising. According to the most recent ONS data, UK residents spent £2.9 billion on visits overseas in January, a 6 per cent increase on the same month in 2018.
Fexco’s analysis of nearly 4,500 transactions, made through Fexco Corporate Payments, also found the number of Eurozone bookings has increased by a third (31 per cent) in the past year, and is up by 147 per cent on its pre-referendum level.
Spending is down in countries including South Africa, where spending has fallen by nearly two thirds (65 per cent) since 2016, and Australia, where spending is down by half (53 per cent) on its level three years ago.
Apart from the Eurozone, the biggest winners of the shifting spending patterns are Switzerland, which has seen spending double in the past year (up 110 per cent on 2019) and the UAE (up 89 per cent on this time last year and up 489 per cent on its pre-referendum level).
David Lamb, head of dealing at Fexco Corporate Payments, said: “Few sectors feel the impact of volatile exchange rates more quickly – or more profoundly – than the travel industry.
“Europe’s proximity and familiarity has always given it an advantage over other travel destinations, but the pound’s rise against the euro in 2019 has boosted the Eurozone’s appeal even further.
“Since the start of the year, sterling has risen more than 3 per cent against the Euro and 1.6 per cent against the Swiss Franc, but less than half as much against the US Dollar.
“That difference is giving the Eurozone a decisive edge, and it’s telling that even at the under-pressure Thomas Cook, Spain is the most popular destination.
“Stiff competition and weak consumer confidence are prompting travel companies to search for value, and on the front line of the industry, we’re seeing many professional buyers make a concerted switch to the Eurozone.
“But with no end in sight to Britain’s Brexit negotiations, the favourable Euro exchange rate may not last, and many astute buyers are opting to lock in the current rate by using a forward contract.”