With the school holidays just around the corner, now is the time for families planning summer breaks abroad to work out how to make their holiday pounds stretch further – especially as sterling is worth less against most foreign currencies than last year.
If you have not decided where to visit yet, check out resort prices in destinations on your short- list and add these to the package holiday price. Don’t assume these will be the same across the eurozone because our Holiday Costs Barometer surveys reveal big variations, even between resorts in the same country.
Resort costs are cheapest in Portugal and Spain and have fallen by up to 25 per cent this year. One reason for this is that these countries rely on tourism and want to keep attracting Scottish holidaymakers!
Paying out for meals can transform the cost of a family holiday, though. Even in Portugal and Spain where meal costs are comparatively low, a daily meal out for four will add around £300 to a one week package price. Picking an all- inclusive holiday, where meal costs are included is one way of controlling the budget, but watch out for items like drinks and internet access that you expect to be included but may be charged extra.
Once the holiday is booked, work out a realistic budget and change enough money into foreign cash before leaving home rather than getting a poor rate at the airport or incurring charges for withdrawing cash from an ATM abroad.
Take advantage of the higher exchange rates available for foreign exchange transactions of of more than £500 or £1,000 in bureaux and online – and if you buy cash online, it can be delivered free to your home or a local Post Office branch.
When assessing how much you will need, allow for sterling’s fall in value. It is worth around 5 per cent less in the eurozone, Croatia and Bulgaria than last June. Visitors to Turkey will fare better as the pound is worth the same as it was a year ago and if you have picked Egypt or Jamaica you will have between 12 and 15 per cent more cash in hand.
It is always wise to carry some cash because a surprising number of restaurants, bars and petrol stations do not accept cards. However, play safe and take a range of payment methods to cover all eventualities – this could be some cash, money loaded onto a pre-paid card and a back-up credit or debit card. Make sure your passports are up to date and have at least three months to run – some countries ask for six months. If the passport is nearing expiry, you can use the Post Office “Check and Send” service, which simplifies the application procedure. Don’t forget travel insurance either.
If you want to use a credit card in a resort shop or restaurant and are asked to pay in sterling rather than local currency, say “No thanks”. This is a tactic known as Dynamic Currency Conversion and payment in sterling carries an extra charge.
Choose restaurants carefully. Prime beachfront positions carry higher prices than local tavernas one street back. It will be much cheaper to eat at lunchtime and choose the set menu of the day rather than go a la carte in the evening. Order carafe wine and draft beer rather than bottles of either and, better still, pick local brews as these are likely to offer the best value.
“Pester power” is another drain on the family purse. Giving in to kids’ demands is understandable, but four in five parents questioned for last year’s Family Holiday Report said they busted their budget paying for children’s extras. Squeeze jelly shoes, swimming goggles and last year’s lilo into the suitcase along with insect repellent and sun cream and we estimate you could save around £30.
You can find all of the latest comparative holiday costs at www.postoffice.co.uk/holidaycosts2013.
• Andrew Brown is head of Travel Money for the Post Office