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British holidaymakers booking trips to America were rubbing their hands with glee last week as the dollar hit an 11-year low. The US currency has now fallen by 27% against the pound over the past two years. In January 2002, the cash rate for tourists was $1.39; last week, it was $1.77.
This is particularly welcome news for travellers tired of being clobbered financially in France, Spain and other European destinations, where the pound has fallen 13% against the euro in the past two years. Many families are opting for an American trip instead.
Tour operators were last week reporting a surge in bookings to the USA, where a martini at the trendy Thom bar in New York now costs £5.60, compared with £7.20 two years ago, and a week's rental of a convertible Chevrolet Camaro can be had for £251, down from £320. Travelbag (0870 900 1350, www.travelbag.co.uk) says business is back to pre-9/11 levels.
It is not just America that is cheap. Prices in the Caribbean and the Far East, where many currencies are pegged to the dollar, have fallen by about 25%. Other destinations, such as the Seychelles and Mauritius, are cheaper because hotels quote rates in dollars.
Thomson says that bookings to Florida this summer are up 9% on last year, on the back of a 12% cut in brochure prices compared with 2003. Other tour operators have used the strength of the pound to freeze rates. Kuoni says that its holiday prices to America have either been held at 2003 levels or cut by about 3%. "We can't pass on the full benefit because accommodation is only one element of a holiday," explains product director Francis Torrilla. "We have to buy seats from scheduled airlines in sterling, and they aren't any cheaper."
How do I make the most of the pound's strength?Go where prices are in dollars or where the currency is tied to the dollar, which might mean Mexico, Malaysia, Barbados or Singapore. And, if you really want to make the most of the drop, don't buy a package: go independently instead. Serious bargain-hunters should start by looking at American websites. By using online discounters such as Gothotel.com (www.gothotel.com) and Roomsaver.com (www.roomsaver.com), you can take advantage of rates that are normally snapped up by price-conscious Americans.
Local tourist boards can be a good source of bargains as well. The Orlando Convention & Visitors Bureau has a website (www.orlandoinfo.com) that will sift through the best hotel deals on specific dates. Last week, it came up with more than 30 hotels offering discounted family rooms in the last week of July, with prices from $42.70 (£24) at the Best Western Universal Inn. A British tour operator would sooner cut off his right arm than sell a hotel room in Orlando during the school summer holidays for just £6pp.
Can I get a good deal from a UK tour operator?Yes, but check first that you can't beat it by going online. Last week, we compared the price of a night in April in a double room at the Hyatt Grand Champions Resort & Spa, in Palm Springs. Thomas Cook Signature (0870 443 4453, www.tcsignature.com) had it for £252, while Expedia (0870 050 0808, www.expedia.co.uk) quoted £207.24; but by booking direct with the hotel (www.hyatt.com) and paying in dollars, the rate fell to $349 (£194), 23% less than in the brochure.
One of the most popular deals among British families is the 14-day Orlando Flex Ticket, which allows admission to Universal Studios, Islands of Adventure, Sea World, Busch Gardens and Wet'n'Wild. The ticket agency Keith Prowse (028 9023 2425, www.keithprowsetickets.co.uk) says that the ticket cost £150 (children £126) last year. This year, it has cut the price to £141 (children £117), and if you buy before February 1, you can get it for just £133 (children £111).
This appears to be an excellent deal - until you look at some of the prices offered by American agencies. UnderCoverTourist.com, based in Florida, specialises in selling park tickets to British visitors: it quotes prices in pounds, has a UK freephone number (0800 081 1702) and even offers free postage to the UK. Last week, it had the 14-day Flex Ticket for just £116.67 (children £96.62).
Similarly, a five-day Disney Park Hopper Plus Ticket bought direct from Disney in the UK (0870 242 4900, www.disneyholidays.co.uk) would cost £179 (children £143). At UnderCoverTourist.com last week, they were priced at £145.24 (children £114.85). For prices, visit www.undercovertourist.com/Tickets/ukprices.htm
Should I buy dollar spending money for summer now?That depends on whether you think the pound will continue to kick butt on the international currency markets. Anthony Wagerman of Travelex says that some people are hedging their bets by changing pounds into dollars now. "It makes sense if you're travelling to America and want to be sure of getting a good rate, although of course it could get better still," he says.
Are there any cheaper destinations out there?Roman Tangl, head of pricing at Thomas Cook Foreign Exchange, says holidaymakers in search of rock-bottom prices should look at Egypt, where the currency fell by 53% against sterling last year, and the Dominican Republic, where a financial crisis caused a crash of 142%.
Huge shifts such as these, however, do not always translate into savings for travellers. In The Gambia, where the dalasi fell by 42% last year against the pound, tourists have found that handicrafts and meals in local restaurants are much cheaper, but not imported goods.
In the Dominican Republic, the peso may have crashed, but the full effect will not be felt by tourists. Hotels and shops usually quote prices in US dollars, and most British visitors stay on all-inclusive packages and rarely leave their resorts.
Those travelling to Egypt will notice a greater benefit. Thomas Cook says that its 2004 brochure prices are 20% lower than in 2003, and further falls are expected when the 2005 brochures are published in May. A Thomas Cook spokesman said: "Hotels quote rates in dollars, but some things in Egypt are very cheap, such as souvenirs and meals in local restaurants. Some traders are now quoting prices in Egyptian pounds, but charging credit cards in dollars, so it's worth changing spending money to local currency and paying cash.
Is cruising cheaper?Only if you book with an American line. Britain's P&O, for instance, sells holidays in pounds and uses sterling on board. So you might sail the Caribbean and enjoy no benefit at all. But its American sister company, Princess Cruises, says its Mediterranean cruise prices are down by 11%, and all costs on board, including excursions, are charged in dollars. On the new Queen Mary 2, prices are in sterling, but dollars are used on board.
Is anywhere more expensive?The Australian dollar has risen by 14% against sterling in the past year; New Zealand is 9% more expensive, Canada 5% and South Africa 7%. If you're going to these countries, it can pay to book with a tour operator, as they set their rates up to a year in advance. Kuoni, for instance, says its prices for Australia are only 2-3% up on last year.
Do I ditch the Alps and ski USA?WITH NEAR-RECORD snowfalls in the Rockies and a declining dollar lowering the cost of everything from a cup of coffee to your lift pass, 2004 is looking like the perfect winter for an American skiing holiday.
Tour operators can't pass on the effects of the latest dollar slide because they negotiated contracts months ago. All the same, prices have barely changed since last year, and at the luxury end of the market, packages to America can be cheaper than to the Alps. For example, one week, from January 31, now costs £1,951pp at The Little Nell, Aspen, with Ski Independence (0870 555 0555), compared with £2,160pp at Le M??l??zin, in Courchevel 1850, with Elegant Resorts (01244 897333).
If you're on a lower budget, the best way to take advantage of the cheap dollar is to book flights, accommodation and transfers yourself. BA (0870 850 9850) currently has a seat sale to Denver, with midweek flights at £297.10pp return. Add to that return minibus transfers to Winter Park with Home James Transportation (00 1 970-726 5060; £47pp) and one week's accommodation at Winter Park Mountain Lodge (726 5587; £243pp, room-only ), and the total is £587pp (based on a February 23 departure). At last year's exchange rates, it would have cost £631pp.
