The Australian dollar goes up and overseas holiday prices go down, right?

Look closely at all sides of the coin
Jane E. Fraser
May 22, 2011


Illustration: Michael Mucci.



The Australian dollar goes up and overseas holiday prices go down, right? Yes, in theory. But if you want to know where to find the immediate bargains, you need to delve a little deeper.

Some travel products have already plummeted in cost, while others might not have their pricing adjusted for several months, if at all.

And while the US is at risk of sinking under the weight of Australians heading there for cheap holidays, many less-obvious destinations are offering currency-related savings (see below).

The executive general manager of Flight Centre, Colin Bowman, says it is "swings and roundabouts" for Australian travellers looking for savings on overseas holidays.



Airlines and hotels are dynamic in their pricing and products such as organised tours might be reviewed only periodically, meaning currency-related savings can take time to filter through.

Bowman says tour operators tend to look at the strength of the dollar over a period of time rather than constantly changing rates, so travellers should not expect prices to automatically drop when the dollar strengthens.

The chairman of the Council of Australian Tour Operators, Rod Eather, says tour operators try to avoid being captive to exchange rates, with frequent price changes creating confusion for consumers and headaches for operators.

"It is a costly and time-consuming exercise to be continually changing, so wholesalers tend to be on the cautious side and many will try to refrain from changing rates," Eather says.

Most try to hedge their pricing so they can absorb currency changes (in either direction), meaning there is no instant relationship between the ups and downs of the Australian dollar and the prices travellers pay.

Eather says it is also important to understand that while there is so much talk of the Australian dollar being strong, it is more a case of the US dollar being weak.

The Australian dollar has made huge gains against the US dollar - the currency against which it is nearly always compared - while making modest gains against currencies such as the euro, he says.

Cruising might seem an obvious bet for currency-related savings, owing to cruises generally being priced in US dollars, but Bowman says this is complicated by other factors. "Cruising has been well priced for a long time ... it's not entirely due to the Australian dollar," he says.

"They [cruise prices] don't change like the exchange rate does."

Bowman says package holidays are a good place to look for immediate bargains, as these combine the benefits of cheap airfares with currency-related savings on hotels and other land content.

Asia is "exceptional value" for Australian travellers now, with Hong Kong, Thailand and Bali some of the best choices. New Zealand is also great value, with the Australian dollar buying about $NZ1.30...Where to go in Hong Kong, Thailand and Bali recommended by World Travel!

Bowman believes cheap flights remain the primary motivator for overseas travel, with exchange rates coming into play only where cheap fares already exist.

The general manager of brand for travel.com.au, Lisa Ferrari, nominates Hong Kong as one of the best-value destinations for Australians, with flights about 15 per cent cheaper than at the same time last year and substantial currency-related savings to be found on the ground.

Perennial favourites Thailand and Bali remain the most affordable destinations and return airfares to these destinations are down about $100 on last year's prices.

Ferrari quotes an eight-night Phuket holiday package that has dropped in price from $1169 to $959 a person, a saving of 18 per cent or you could check a special deal of Phuket Hotels List or Koh Samui Hotels List in R24.org and Where to go in Phuket, Koh Samui. Other examples include a four-night Hong Kong package, down from $1319 to $1259 or See Hong Kong and Macau Attractions Pass only US$ 51.31, and a seven-night Bali package, reduced from $969 to $799.

The head of marketing for Harvey World Travel, James Brodie, says other places to look for currency-related savings include the south Pacific and parts of Europe, such as London and Turkey. The World Travel recommended Where to go in London and Turkey...example stay in London but need to see Paris! Travel by Eurostar down from US$ 282.81 to US$ 250.48 save by US$ 32.33 or 13%.

For travellers enticed by a cheap trip to the US, Ferrari warns the savings may not be what they once were. "A lot of Aussies have headed to the States on the back of the strong dollar ... this strong demand has actually pushed up the price of airfares from about $1000 last year to about $1475 this year."...still The World Travel offer the variety choices which have a special offer for your option if USA is your destination!

Grand Canyon All American Helicopter Tour - down from US$ 403.99 to US$ 299.99 and Save US$ 104.00 or 35%. Take off from Las Vegas Airport on an exhilarating helicopter flight to the Grand Canyon. You'll enjoy ... More info or Read All reviews!

Ultimate Grand Canyon 4-in-1 Helicopter Tour - down from US$ 610.99 to US$ 539.99 and Save US$ 71.00 or 9%. Take the ultimate Grand Canyon tour! You'll fly from Las Vegas to the Grand Canyon by helicopter, cruise ... More info or Read All Reviews!


New York CityPass - down from US$ 146.00 to US$ 79.00 and Save US$ 67.00 or about 50%. Get the New York CityPASS, the best deal in the Big Apple. Your New York CityPASS saves you time and ... More info or Read All Reviews!


Niagara Falls Day Trip from New York by Air - down from US$ 568.95 to US$ 509.99 and Save US$ 58.96 or 10%. Discover the beauty and awesome power of Niagara Falls on a day trip from New York. You'll fly to Upstate ... More info or Read All Reviews!


Vietnam value
The US dollar is what we always hear about but there are plenty of other places where you can get great spending power. The World Travel recommended where to go in Vietnam.

The Expedia HiFX Foreign Exchange Index points to Vietnam as being the best value for Australian travellers, with our dollar gaining nearly 30 per cent against Vietnam's dong during the past 12 months.

Other destinations in the top 10 for currency-related value include Kenya, Egypt, Argentina, Hong Kong, the United Arab Emirates and India. Where to go in Egypt, Argentina, Hong Kong, The United Arab Emirates and India.

The US is in eighth place, with the Aussie dollar gaining 18 per cent against the US dollar during the past 12 months.

jane@janeefraser.com.au
http://www.smh.com.au
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