more…

In a previous blog on this topic I concentrated on the Euro. Grim.
The US Dollar is an unhappy story too, the Pound having lost 20% of its value against the Dollar in the last six months.

But there is good news. For instance, over that same six month period, the Pound has risen 60% against the Indian Rupee. Perhaps time to investigate those wonderfully priced packages to Goa and Kerala. Remember the effect is true of the Seychelles too.

If beaches don’t float your boat, why not investigate India’s great cities or wonderful countryside. Rajhastan is a particular favourite of mine. Diwali Night in Jaipur was one of my greatest travel experiences.

If India doesn’t appeal, remember that , over the same six months, the Brazilian Real has lost nearly 1/6th of its value against the pound. Could be time to fly down to Rio, particularly with those amazing TAP air fares.

All this said, I am particularly drawn to those frontiersman cities of the Amazon, such as Manaus and Benjamin Constant.

I was recently asked about budgeting a world tour.  As I write, we are offering an Air New Zealand round the world fare of £699.  One element sorted!

But day-to-day living and accommodation costs are a whole different story.  In the current economic climate you are trying to balance currency depreciation, price inflation and price deflation.

To stand any chance of a realistic budget you’ve got  to take a continent by continent view, preferably country by country.  Also consider your own personal travel style.

The Pound has gone into virtual freefall against the Euro.  British economic data the past couple of weeks give evey reason to believe the relative strength assessments of Britain and the Eurozone economies is correct.  As I write, at the foreign exchanges, the ratio is 1:1.

Things are not looking good for your day-to-day expenditure in the Eurozone; and the conventional wisdom has become “think Turkey”.  At face value, and in the sense of day-to-day expenditure, that is perfectly sensible.  But it does rather depend how you purchase your Eurozone holiday.

If you buy your accommodation as you go, this will hurt, unless there is deflation in the hotels market in the particular Eurozone country; and that will depend on demand.  For instance, if demand for Greece continues low, there are likely to be last minute discounts from hotels and lower rates from old ladies at quaysides!

What you do know for the Eurozone is that the package holidays will be produced from contracts with hoteliers where much higher Pound to Euro rates  were locked in at the time of writing (at a guess, mostly around 1:1.35).  Also, massive bulking discounts will have been negotiated.  Additionally, in the face of the current economic situation,  tour operators will be slashing their margins (look at some of the early-bird bargains).

 So things can look  good for the Eurozone, by buying a package.  If you buy all inclusive, the food and beverage costs will have been locked in at high Pound to Euro rates too.  You’ll barely have to carry any cash anyway!

So there is a big message there for what to do for the Eurozone.  But, when will it all go wrong?  For another feature this year is that tour operators have slashed capacity.  Will there be a point (this summer) when there are relatively few holidays against demand, so prices will rise again?

Now, the Eurozone and close-by alternatives (Turkey, Egypt, etc) are relatively easy to analyse.  What of the world? Here you have to introduce that the Pound has softened against the US Dollar and that many economies have a Dollar link.  The Japanese Yen needs to be considered too.

Let’s start with the Yen, in fact consider Japan.  The Yen has hardened.  Bad news.  But there has been internal price deflation in Japan for many years now, the country not having recovered from its “last” economic downturn.

In 2007, I met a Japanese girl in London who was full of OMG moments about prices in London.  I asked her where she was from: Tokyo.  Hmm!  Strangely, a few weeks later Japan Tourism Authority started a campaign comparing Japan and UK prices, article by article.  Things looked good.  There as an overall strapline that prices on many items were cheaper in Japan than London.  I think they were being modest.

I went to Tokyo; and everything was significantly cheaper than London (admittedly, in itself a worst case).  My central Tokyo en-suite Western-style Ryokkan room was £28 per night.

Outside Tokyo, prices are much lower.  For instance, you’ll be amazed at Kyoto Ryokkan costs.

Your basic calculation now is what is happening faster, price deflation in Japan or appreciation of the Yen against other currencies in general or the Pound in particular?

You calculation for US$ economies can be similar.  Again, if looking to packages, you must remember that earlier rates will have been locked into operators’ contracts with hoteliers and transport providers.  To put it crudely, Virgin Holidays are offering great prices to Florida at the moment.

US$ related economies are more complex, not least because in some of them there are secular trends within tourism. I’d love to be able to give the example of Thailand, but I’m unsure of the majority position say on the denomination of contracts.  As best I know, given that the Thai Baht has hardened over the years to be, at least, a regional hard currency any US$ linkage has all but disappeared. Certainly, you can’t spend US$ on the street in Bangkok as you once could (in fact that’s not even  possible in Vietnam and Laos now).

Anyway, to the point, hotel rates in Thailand are in freefall (as are flight costs to Thailand).  This is all due to the political unrest in general and the specifics of the airport occupations, together with the Thai Government’s refusal to say that the same couldn’t happen again.  The disco fire hasn’t helped, though it wasn’t in a tourist area.

There are internationl quirks too.  For instance Mauritius contracts tend to be Euro denominated.  Not good for us.

Going back to linked economies, my own recent experiences are interesting.  Last autumn, I  looked at hotels in Jakarta. Various Ibis hotels in Jakara were £23 per night.  The current price is £17 per night.  In other words, deflation in the Indonesian (indeed, global) hotels market has clearly outpaced depreciation of the Pound.

If  it is sounding like you need to be an Economics major to  do the maths, there is a really simple answer. Go onto www.couchsurfing.com – or use our Free Accommodation link – and ask local people. You can then simply pop the local prices into our foreign exchange calculator.

I was in Lisbon just before Xmas for the first time in many years. But I still got that long-haul feeling for a short-haul price.

This is a city in turn elegant, characterful, positively rundown, brand-spanking new.

Baixa is a planned grid of streets established after the Great Earthquake of 1755. This is Lisbon’s epicentre, with fine shopping and dining. There is much important neo-classical architecture; and the area is being considered for World Heritage Site Listing.

Alfama is quite the opposite of Baix’s openness. This area survived the Earthquake; and is the original medieval Moorish city of winding alleys with whitewashed houses.

Of particular interest in Alfama is Feira da Ladra, The Thieves Market. This is an interesting walk up from Apolonia Station (or get there on the 28 tram). The market is open Tuesday and Saturday mornings. Nothing appears beyond sale!

Most tourists would now visit  Belem. This is the area of town for museums and monuments; and all by the Tagus estuary.

There are fantastic views out over the estuary that really give you the feel the discoverers had as they set sail. I particularly love the Monument to the Discoveries for that feel.

Also on the estuary is Belem Tower. In the vicinity are Jeronimos Monastery, Ajuda Palace and the Coaches Museum.

A favourite area of mine, definitely not touristic, is Martim Moniz. This is a seething multi-ethnic area. Take the metro to Martim Moniz (tram 28 is an alternative) and you actually come up within a shopping centre filled with mostly Indian and Chinese shops. The surrounding narrow alleys and streets are mostly Chinese.

It is a short walk from here to Intendente. Again a multi-national enclave, this time very rundown, but subject to a massive redevelopment plan.

A final area that tourists don’t reach is Parque das Nacoes, though this is a matter of distance. It is a little further out. Just remember, though, how brilliant public transport – metro, trams and buses – is in Lisbon. Despite being built on seven hills, I also find it a very walkable city.

Parque Nacoes was mostly built for Expo 98. Here you find the amazing Oriente Station, a shopping mall, casino, restaurants and a fantastic view out over Vasco da Gama Bridge.

The bridge is eleven miles long. It is redolent of the Floriday Keys drive. You feel you just have to drive that bridge!

For further information go to www.golisbon.com and www.lisbon-guide.info

Mark Azavedo

I spent a great few days in Macau last year.  For hotel quality to a price this is a fantastic destination. It amazes me the place is so little known here, when Las Vegas has become such a favoured destination.  Macau’s gambling took $10billion in 2007, against Las Vegas’ $6billion.

I’m no gambler, but the shere spectacle of the Venetian will be gawped at by all.  It is a replica of Venice, with its own mini St Mark’s Square.  Other major casinos are Wynns, Sands, Grand Lisboa. Equally, there are some very small casinos, especially at Fishermans Wharf.

I was amazed at the amounts ordinary Chinese families were spending in the casinos.  As for extraordinary Chinese families …  I was also interested that games of chance are massively favoured.  I sense that in the West we focus on games of skill – or at least like to think so!

No gambler, I went for the best available bet – the unfeasibly high exchange rates offered in the casinos as an encouragement to spend. I then ran!

I found a way to beat the house! I think!!

Macau Tourism are starting a major push for this fascinating destination. Go to www.macautourism.gov.mo   Also, go to www.olamacauguide.com, a favoured site of mine.

Mark Azavedo