501 Places

Loadsamoney! (Just under $100 worth of Uzbek Som)

According to the GfK Ascent Survey of 15,000 UK holidaymakers in 2009, as presented at the CIMTIG organised Travel Vision 2010 evening, UK tourist numbers for last year to Egypt are up 20% and Turkey up 9%. On the downside the Canary Islands have seen a drop of a massive 22%, while numbers are also heavily down in Italy (19%), Cyprus (15%), Greece (13%) and Spain (13%).

These are quite dramatic numbers, and spell a serious issue for the traditional Mediterranean destinations who have built much of their success on the back of the British holidaymaker. What do all these countries suffering a slump have in common? The most obvious explanation is the Euro, against which the pound has weakened heavily in the last three years (although it has been fairly stable for almost 18 months now). We heard how American tourism patterns changed when the dollar tanked in the last decade, with less Americans coming to Europe and to Japan. As Europeans we also noticed how those places that tied their currencies to the US dollar suddenly became more attractive to the rest of us.

But on closer examination something doesn’t make sense here. If we look at the big winner in this survey it is Egypt, enjoying a 20% boost in UK visitors in 2009 alone. The explanation presented for this was that the strength of the Euro is driving Brits to look for better value elsewhere. Yet the British currency has fallen by almost exactly the same amount against the Egyptian currency as it has against the Euro (11 Egyptian pounds to the GBP in 2008 and a little over 8 today).

So why the major change in tourist hot-spot from Spanish and Greek resorts to Egyptian ones? I must admit until I heard these figures I had no reason to check the state of the Egyptian currency, but I had heard much of the PR that had told us all that people were looking to take their holidays away from the Eurozone and that Egypt and Turkey seemed to be the obvious alternatives.

I suspect most people have no inclination to study currency markets (I find them fascinating but I am aware that this is not a very cool admission to make). So if the message is that the Euro countries are expensive and it’s best to go outside of the Eurozone to make your money go further, then perhaps a lot of people have taken this at face value and headed off to Thomas Cook and asked for a holiday to Egypt or Turkey.

Which really leads me to commend the Egyptian tourism authorities on an excellent job well done. They have managed to jump on the bandwagon of anti-Eurozone publicity and reap rich rewards, without anyone holding up their hands and pointing out that their currency has gained in strength at the same pace as the now expensive Euro. It looks to me like a marketing strategy of keeping your head down while making money; and it is being executed with much success.