The pound has been in trouble ever since the Brexit vote in 2016. While it briefly rose against the dollar and the euro this week, buoyed by a Supreme Court decision that made an October 31 departure from the European Union less likely, by yesterday it was back where it started.
It means places that once seemed a bargain are looking as expensive as Switzerland. But don’t despair.
While a trip to New York or Paris might not sound such a good idea to the cost-conscious traveller, there are plenty of other destinations where the pound has peaked rather than plunged against the local currency.
The pound has been in trouble ever since the Brexit vote in 2016. It means places that once seemed a bargain are looking as expensive as Switzerland
‘The situation might look grim for sterling, but many of the world’s economies are in an even worse state, and their exchange rates have moved in favour of the pound,’ says Ian Strafford-Taylor, of travel money specialist FairFX.
In Argentina, there are the breathtaking Iguazu Falls, made up of 275 spectacular waterfalls on the border with Brazil.
In Iceland, holidaymakers feeling a little jaded after sampling Reykjavik’s lively club scene can revive themselves with a trip to that queen of geothermal pools, the Blue Lagoon. While in Sri Lanka, there are mile upon mile of idyllic palm tree-lined beaches that will appeal to sun-worshippers and surfers alike.
So here’s our global guide to the most alluring destinations where sterling will go farthest, complete with details of how far £500 will stretch today compared with this time last year.
Cash in on chaos
The economy in Argentina has been in recession for more than a year
Argentina: Increase in value of local currency for every £500 exchanged — £131
South America’s second biggest economy has been in recession for more than a year.
The shock victory of a populist presidential candidate in primary elections in August wiped 30 per cent off the value of stocks and shares and sent the peso into freefall against the pound, making sterling worth more than 70 pesos at one stage. It remains in the doldrums.
The birthplace of the tango may have lost its mojo economically, but it still offers thrilling landscapes, gaucho culture, world-class steak and delicious wine.
How to do it: Llama Tours offers a 12-day tour of Buenos Aires, the Andes and the spectacular Iguazu Falls from £1,989pp (llamatours.co.uk, 01279 704136).
Trot to Tbilisi
Georgia: Increase in value of local currency for every £500 exchanged — £30
A slump in the Russian rouble and the Turkish lira has hit Georgia’s exports, with a knock-on effect on its exchange rate. Pictured is the Georgian capital, Tbilisi
A slump in the Russian rouble and the Turkish lira has hit Georgia’s exports to two of its main trading partners, with a knock-on effect on its exchange rate.
Its capital Tbilisi has long been a significant tourist centre, with attractions such as the 4th-century Persian Narikala Fortress and the ancient Anchiskhati Basilica.
Outside the capital, the rock-hewn monasteries at Vardzia, the vineyards of Kakheti and Caucasus are well worth a look.
How to do it: Riviera Travel offers a nine-day trip at £1,499pp (rivieratravel.co.uk, 01283 880163).
The rand tour
South Africa: Increase in value of local currency for every £500 exchanged — £4
There have been sharp falls in the South African rand. Why not start at Cape Town, the most spectacular of South Africa’s three capital cities?
China is South Africa’s main export market and the slowdown in Beijing’s economy, coupled with a slump in commodity prices, has led to sharp falls in the rand. Which is great news for tourists.
Why not start at Cape Town, the most spectacular of South Africa’s three capital cities? Nestled in the shadow of Table Mountain, it is surrounded by the country’s celebrated Winelands.
From there, it’s a short hop to the beginning of the Garden Route, a 190-mile stretch of coast from which to explore South Africa’s natural beauty, beaches and wildlife.
How to do it: Kuoni offers an 11-night Classic South Africa tour from £3,135pp (kuoni.co.uk, 0800 140 4800).
The wow factor
Iceland: Increase in value of local currency for every £500 exchanged — £27
There is currently a favourable exchange rate for Iceland, home of the Blue Lagoon, pictured
Tourism makes up a third of the Icelandic economy, so when a 3.7 per cent drop in the number of foreign visitors in the first three months of this year was followed by the collapse of the country’s main budget airline, Wow Air, the krona was hit badly.
As a result, some hotels have cut rates. That, plus the favourable exchange rate, means there has rarely been a better time to check out Iceland’s dynamic capital Reykjavik, plus its volcanic landscape and geothermal pools, such as the famed Blue Lagoon.
How to do it: British Airways Holidays offers three-night city breaks from £165 (britishairways.com, 0344 493 0125).
Namibia: Increase in value of local currency for every £500 exchanged— £4
The Namibian dollar has dropped in line with the South African rand. One of the best places to visit in Namibia is Etosha National Park, pictured
One of South Africa’s northern neighbours, Namibia catches a cold when Pretoria sneezes, and its dollar has dropped in line with the rand, making it another good-value destination for the currency tourist this year.
Go on safari in Etosha National Park (black rhino, giraffes, lions and leopards), track desert-adapted elephants in Damaraland or watch the sun rise over the dunes of Sossusvlei.
How to do it: Trailfinders offers an 11-day Journey through Namibia from £1,897pp (trailfinders.com, 020 7084 6507).
A Peso the action
Uruguay: Increase in value of local currency for every £500 exchanged — £24
Montevideo in Uruguay, pictured, is dubbed the world’s most relaxed capital
South America’s second smallest country has suffered from falls in the price of exports such as meat and soya and rising inflation.
But as a holiday destination it is well-rounded, with the world’s most relaxed capital in Montevideo, beach life at Punta del Este and a Unesco-recognised historic quarter in Colonia del Sacramento.
How to do it: Return flights to Montevideo from £960pp with Swissair (Swiss.com). Doubles at the Puerto Mercado Hotel in Montevideo from £37 a night (puertomercadohotel.com.uy).
Madagascar: Increase in value of local currency for every £500 exchanged — £16
Madagascar is a dream destination for outdoor enthusiasts but its main draw is wildlife. Its currency is down 22 per cent on last year
Madagascar’s currency, the ariary, has been hit by the news that exports in the first half of 2019 were 22 per cent down on last year, after a smaller than predicted crop of its main export, vanilla.
With its rainforest, desert, hiking and diving, Madagascar is a dream destination for outdoor enthusiasts but its main draw is wildlife.
Split off from the mainland of Africa millions of years ago, this island 250 miles off Mozambique is the Jurassic Park of the modern world, with an array of species that exist nowhere else.
One of these is the lemur, which has prospered because monkeys and apes, its main predators elsewhere, never made it to Madagascar. Today there are 60 varieties, from the 25g pygmy mouse lemur to the increasingly rare indri.
How to do it: Audley Travel has a 13-day Madagascar Rainforest and Island Escape from £3,300pp (audleytravel.com, 01993 838925).
Sri Lanka: Increase in value of local currency for every £500 exchanged — £5
A temple in Mirissa in Sri Lanka. The Sri Lankan rupee has been hit by the rising cost of servicing a national debt that tops £40 billion
The Sri Lankan rupee has been hit by the rising cost of servicing a national debt that tops £40 billion — but that has been good news for tourism.
Beach resorts are a big draw on this island republic off the south-east tip of India, but so are tea plantations and national parks.
How to do it: Sri Lanka Holiday Architects offers a 14-day tour from £2,165pp (srilankaholidayarchitects.com, 01242 253073).
Asian hot spot
Uzbekistan: Increase in value of local currency for every £500 exchanged — £43
The Uzbek unit of currency, the Som, lost almost 50 per cent of its value the day exchange controls were relaxed in 2017. Pictured is the country’s capital, Tashkent
The Uzbek unit of currency, the Som, lost almost 50 per cent of its value the day exchange controls were relaxed in 2017 following the death of President Islam Karimov, and it has yo-yoed ever since.
But there is plenty to see in a country that was once a key stop on the Silk Road. From the grand 14th-century mausoleums of Samarkand, which inspired the Taj Mahal, to the world’s most ornate subway system in Tashkent, Uzbekistan is rich in history and architecture.
How to do it: Jules Verne runs a seven-night Highlights of Uzbekistan tour for £1,395pp (vjv.com, 020 7633 6700).
And where sterling is struggling
Uncertainty over Brexit coupled with a long-term economic boom in the U.S. resulted in the pound suffering a 6 per cent fall against the greenback over the past year. That means visitors crossing the pond will get £33 less on every £500 they convert into dollars.
Sterling has fallen 11 per cent against the Turkish lira, which means holidaymakers will get £62 less on every £500 they convert.
But this news is not as bad as it might appear. This time last year, the Turkish lira had just plunged against the dollar and the world’s other major currencies after President Trump imposed heavy tariffs on Turkish exports to the U.S. following Ankara’s refusal to release an American pastor it had arrested on suspicion of terrorism.
These tariffs were relaxed after Pastor Andrew Brunson was freed last October, and the sterling-lira exchange rate is now much less favourable than it was last September. But it remains at 7 liras to the pound, compared with 4.7 liras two years ago.
- Details of exchange rate shifts as of yesterday provided by FairFX (fairfx.com).