Exchange rates drive UK holidaymakers away from Spain and euro zone


Over recent months many Britons have been enticed to fly to the United States because of the good exchange rate between the pound and the dollar, but the concerning flipside of this coin is that, with the summer holiday season approaching, Britons are shying away from Spain and the euro zone.
A recent survey by internet site Savebucks.com, a price comparison travel website, suggested that one in five Britons were cancelling their holidays as the financial reality began to bite.
This tale of gloom has been rejected by other industry sources but a change in booking habits does appear to be taking place. The traditional British holiday in Spain as well as Greece now seems to be under threat as tourists seek out areas where the pound still punches its weight.
A recent year-on-year comparison showed that the pound had fallen around 17 per cent to the euro. While tourists would have received 1.47 euros for their pound in April 2007, that figure had dropped to as low as 1.22 euros. The pound has since rebounded slightly; yesterday it was worth 1.27 euros.
The property market has already seen a slump as Britons, faced with restricted mortgage lending at home, a drop in value of their UK homes and the slowness of sales, having pulled back from buying in Spain. Now the top end of the holiday letting market in Spain is seeking new markets. As the rental price of a luxury home rockets with the slump of the pound, owners are seeking to attract visitors from Holland, France and Germany - all within the euro zone.

Spain's loss, UK's gain
While Spain is set to suffer, there is good news for the British holiday market. Throughout Britain there is an upturn in bookings as people opt to spend their holidays at home, especially as England and the other home nations will not be participating in this summer's European soccer championships. The UK regional airline Flybe also reported a 20 per cent rise in flights over the May bank holiday period.

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