Travel firms do it. The travel media does it. But is it right to recommend destinations based on very crude economics?
Last year saw an increase in the number of British travellers to destinations such as Turkey and Egypt. This was partly due to an effort by groups with a vested interest (i.e. companies that sell holidays to Turkey and Egypt) to convince people that these destinations offered much better value than countries with the Euro as its currency.
Trying to sell holidays or destinations based solely on exchange rates is simplistic and can even be misleading. The rate of inflation in Turkey was 6.5% in December yet only 0.9% in France for the same period, having been negative for most of last year. However, you won’t hear travel firms telling people that prices are rising much more quickly in Turkey than in Europe.
Should holiday firms encourage people to visit certain destinations based on misleading figures? You wouldn’t go into your local bank to ask for travel advice so why take financial advice from a travel firm? Unfortunately it is something many travel firms are keen on doing. They also like to manipulate the data to provide an even more distorted picture by choosing a day when the disparity between two currencies is at its greatest as their point of reference.
Visit Britain is currently very happy to tell the world what great value Britain is due to the weakness of the pound. Yet one of the side effects of the weak pound and quantitative easing will almost inevitably be rising inflation. With the fragile economy giving little scope for interest rate rises it is likely that prices will be rising here at a greater rate than in mainland Europe. Will Visit Britain be telling everyone?
photo by kiki99
