Pound For Pound, Don't Cancel Your Holiday Abroad
by David A. Ross
Pound For Pound, Don't Cancel Your Holiday Abroad - Corfu Magazine - Vol. 4, No. 3, March 15, 2009
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Anyone in Britain planning to travel this year to the Eurozone or to the USA is certainly watching the trading value of the pound to Euros or dollars. And what they are seeing is far from pleasing. The precipitous decline in trading value of the British currency during late 2008 and early 2009 is nothing short of alarming - and not just to those planning holidays abroad. Every citizen in the UK is adversely affected when he purchases foreign made goods, not to mention expat pensioners who have seen their incomes decline by as much as twenty-five per cent.
While the pound has recovered somewhat during recent weeks, the prospects in future for added valuation are unlikely. At its worst, the pound reached an all time low during December 2008, trading at 1.022 against the Euro - virtually one to one! That trading level represented a 13% decline in the month of December alone, and nearly a 25% decline for the year 2008. And if that news were not bad enough, British housing values also declined 9% during 2008 and were forecasted to decline even further during 2009. In the labour market, it is forecasted that 600,000 workers in the UK will be made redundant in the coming year.
The single biggest influence on the pound's decline is directly traceable to banking policy. As credit markets around the world tightened and lending virtually came to a stand still, interest rates in the UK fell from 5.75% to a mere 2%, and are expected to go even lower as the recession deepens. The Central Bank has cut interest rates so dramatically in an attempt to stimulate an economy that seems in deeper peril by the day. Not since the end of the Second World War has the British economy been in such a state.
Of course, the British are not the only ones feeling the proverbial pinch. Americans are feeling it too - perhaps even worse than the Brits. And in the Eurozone, the recession is deepening by the day, and when all is said and done, it may suffer a worse fate than Britain or the United States. And poor Japan saw a decline in GDP of a whopping 13% in the month of January alone. Indeed, it seems that the so-called economic realities that most people took for granted in previous decades is out the window, and who knows where the downward spiral will end - or if it will end!
So what is one to do? Tighten his belt, to be sure. Economise whenever and wherever possible. Eat out a few less times per month. Put off buying a new car (and of course that is another story altogether, as car makers around the world literally count the days until they will be forced into bankruptcy), and scale back that planned holiday this summer. And of all measures one might take to economise during tough economic times, it is perhaps the postponing of a well deserved holiday that hurts most. We have all come to highly value our leisure time, and for younger members of society such cut-backs are indeed something quite new. But is it really necessary to cancel those travel plans entirely? Perhaps not...
In countries like Greece - and especially on the Greek islands - tourism has replaced agriculture as the mainstay of the economy. Whatever happens with the world's economies, I think it is safe to say that the Greeks are not going to return to olive cultivation as the foundation of their economy. Nor shall they abandon tourism as their livelihood as a result of a poor year or two in the trade. The simple fact is that the merchants and providers in the tourist industry on Corfu are not only open for business as usual, but many are in the process of making renovations and upgrades. It's not that they fail to understand the gravity of the world's economic situation (it has reached Greek banks as well as Greek citizens just as it has in all the world's developed countries), but they are determined to carry on and hope for a brighter future. Wherever people live, and whatever they do to make their livelihood, life goes on whatever the policies of the Bank of England or Citicorp. And while fewer people will take their holiday abroad this year, the Corfiots are still expecting to host a significant number of visitors to the island this year - albeit at a somewhat different spending level.
The fact is that not all people will completely forego their holiday this year. Many will simply take a different approach than they have in the past, choosing less expensive accommodation perhaps, eating out less frequently and opting instead for self-catering apartments over full service hotels, or maybe taking one less tour or participating in fewer activities. Still, the option for a cheaper than average holiday exists in the Greek Isles, and on Corfu, just as it has in years past. Perhaps it might be advantageous for travellers to consider booking their flights and accommodation directly rather than through a traditional tour operator in the UK. Or, if one feels the need for security that a tour operator traditionally offers, then he might consider booking through one of the many fine Greek tour operators, which during good times and bad, can lead to substantial savings. These days it is easy to book flights independently on the Internet through any number of online brokers, and often, if one is diligent in his search, the price he pays is far less than an all-inclusive package purchased from a traditional tour operator. Greece (Corfu in particular) is full of small, independently owned and operated hotels, studios and tourist apartments. Many have their own web sites, and a simple Google search will reveal splendid possibilities in every price range. Many of these establishments have frozen their prices in an effort to attract customers, so the news is not all bad. Bargains are waiting for those who simply do the research, so perhaps one might reconsider his moratorium on vacationing abroad this year; take a slightly different approach to save money, and the result may be an even more personal and enjoyable holiday. In fact, many travellers have successfully employed this strategy for years and wouldn't have it any other way.
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