Travel Money Advice
Head of Financial Services, Thomas Cook UK.
It won't have escaped the notice of anyone preparing to go abroad for their summer break that one of the immediate impacts of Brexit, at least in the short term, has been a fall in the value of the pound. A weaker exchange rate can quickly translate into hundreds more pounds spent on things like drinks and meals in resort. So it’s understandable if you're asking yourself if holidays are going to cost more post Brexit.
The first thing it's worth remembering is that it's not unusual to see fluctuations in exchange rates. We might have seen a sharp drop in the value of the pound versus the Euro, for example, in the last month but the exchange rate today is about the same as it was in August 2013. And, it's actually better (at least for us holidaying Brits) than the average exchange rate from 2009-2011.
So as an example, a €2 ice cream would have cost you around £1.60 on 1st August this year. That same €2 ice cream would cost only £1.40 on the same date last year, but in 2014 it was back to £1.60 and would have been more expensive in 2013 at £1.70. Looking further back - if you were on a 2008 new year’s eve holiday (a pleasant 22 degrees in the Canary Islands) the €2 ice cream would have cost almost £2.
Secondly, as a big holiday company, we’re better able to protect our holiday prices from movements in currency. Our financial planning teams buy foreign currency months ahead which means our prices will remain unchanged for 2016 and won't be much impacted in summer 2017 either. That’s especially good news for customers on an all-inclusive holiday who don't have to spend in resort.
Thirdly, make sure you plan ahead for the best deal when it comes to buying your holiday spending money. It’s likely to cost more to change money in resort, so why spend your time trekking round town when you could be spending time having fun? And wherever possible, you should avoid changing your money at the airport. You’re in a captive market and the exchange companies set rates higher there than elsewhere.
Our advice is to start thinking about changing money from when you book, spreading the cost and the exchange rates – none of us know if it will go up or down. A prepaid travel money card is a good way to lock in exchange rates without having to carry lots of cash around. The Thomas Cook Cash Passport offers very competitive rates, and if you download our whatstherate app you can get notifications when your holiday currency hits a certain rate. Then simply go online and top up your card.
If you prefer to take cash with you, make sure your check your travel insurance. Most cover is limited to £300 - less than the amount families generally spend abroad. If you change between £400 and £2000 at a Thomas Cook store then you automatically get free travel money insurance, helping to give piece of mind when carrying cash.
If you have any questions or want our advice on travel money, please do get in touch by calling 01733 224 808 or click on the live chat button.