Making the most of your holiday money is a top priority when you’re planning your travels for the year. We spoke to finance expert Andrew Hilton OBE (Director of the Centre for the Study of Financial Innovation), about how travellers from Britain can get the best value for money when going on holiday.
Do the financial problems in some European countries mean that holidays are now cheaper?
For the most part the answer is sadly, no. However, understanding the issue can mean that the canny traveller is in a better position to take advantage of potential benefits as well as avoiding pitfalls.
Before the euro came into play, European countries that found themselves in financial difficulties could take steps to devalue their currency, which instantly made them look more attractive to holidaymakers. However, now all the euro currencies are in harness, devaluing is not an option for countries such as Greece, Portugal, Cyprus, Spain or Italy whose economies are challenged.
The euro is holding strong against sterling because it includes strong currency countries (like Germany, Austria and the Netherlands) as well as weak currency countries. The upshot is that a coffee and a pastry will cost you pretty much the same wherever you go.
Without seeming mercenary, do we benefit in anyway from the situation?
The social cost of the euro crisis has been enormous and unemployment is very high in countries such as Greece, Spain, Portugal and Cyprus. This has led to a marked improvement in service levels, as businesses seek to attract and retain new customers.
What are your top stress-busting tips for travellers who want to make the most of their holiday money?
1 Look out for innovative deals, promotions and personalised touches which can make for a better holiday experience.
2 If you’re looking for a great value beach holiday consider looking outside the eurozone. Newer destinations which are not part yet of the eurozone have a lot to offer, for instance Croatia, Montenegro, Black Sea and Turkey. These destinations are still accessible without long-haul flights, and trusted tour operators and airlines have great deals and peace of mind to offer. This advice also applies for city breaks and even winter sports; Bulgaria, Serbia and Romania all have great ski resorts.
3 Make sure you get the best exchange rate, don’t be fooled by ‘commission free’ deals! Travelex Travel Money is considered one of the most competitive, closely followed by a number of other high street exchange bureaus. As a general rule, don’t use hotels or airports to change your money if you can help it.
4 An alternative to credit or debit cards are currency cards. These carry your travel money, with added benefits. For example, the FairFX card offers great exchange rates, is free to use in shops, hotels and restaurants worldwide, and does not charge commission.
5 Watch your credit card! Cards are more likely than ever to be cloned these days, even chip and pin ones. Remember that your credit card issuer has liability so long as you report any problem promptly. Ensure you’ve taken the emergency numbers with you so you can report a loss promptly. Remember that debit cards are a slightly different issue and generally you will have more exposure in the case of fraud.
6 If your money is stolen ensure that you report this to the police in line with the terms of your travel insurance, so that you can claim for your loss.
7 If you lose your card most providers will replace this within 24 hours, however if you need cash urgently you can arrange for someone at home to transfer you money via a bank to bank transfer or or a wire service such as Western Union. There are also a number of online money transfer services to consider.
8 If you’re able to take two different credit cards with you, do so. Leave one in your room safe, or with reception for safe keeping.
9 Remember to tell your card issuer that you are going away – particularly if you are going to a new destination. They use an algorithm to predict whether a transaction is genuine, and if you have never been to Romania, for instance, they may turn down a transaction if you haven’t kept them in the loop.