Simon Calder: How to be the talk of the taverna - take euros
The man who pays his way
Saturday 23 July 2011
Just when we should probably all be staying at home, bemoaning Britain's dire economic straits and waiting anxiously for news of the euro, the opposite is happening. This weekend, several million of us will jostle for the UK's exits: lining up for take-off, flooding through the Channel Tunnel or watching Dover's white cliffs recede at the same pace as our spirits soar.
The great getaway starts this weekend. Tomorrow is the busiest day for departures at Heathrow, with an average of two passengers leaving every second during operating hours. Gatwick hits its peak next Friday. Yet, despite the crowds, the evidence is that many people have still to book.
You can find fabulous prime-time deals such as just over £400 per person return for a week in the Azores or under £1,300 for an all-inclusive holiday to Mauritius.
Around the Mediterranean, too, there are some once-in-a-decade deals: if you're easy about which Greek island you end up on, you can take a family of four on a proper package holiday for under £1,000. But could euro-anxiety persuade you to opt for wild Wester Ross or the nearest waterpark?
One typical headline this week read "The crisis that threatens to bring down the euro", leaving some holidaymakers to conclude that they could be the mug in the taverna who's left feebly clutching a wad of worthless currency.
Worry not. Indeed, dare to look a few summers ahead, to a time when Greece appeals even more.
Currencies comprise a sustained confidence trick. People agree en masse to believe that a printed piece of paper is a voucher exchangeable for an airline ticket, a beer or admission to the Acropolis. Yet, when confidence weakens, a currency can sometimes be strengthened.
Twenty years ago this summer, a currency union the same size as the euro zone began to fall apart. I was lucky enough to be back in the USSR just after the August 1991 putsch attempt precipitated the break-up of the Soviet Union.
"The revolt is dead – long live the rouble," was roughly the slogan. As an empire hitherto bound together by the rouble started to disintegrate, the currency began to be traded freely. After decades of ineffectual manipulation by Kremlin economists, the rouble acquired a value in terms of dollars or Deutschmarks. Its appeal to everyone from Estonia to Moldova intensified. Travellers carrying roubles roamed freely and economically around the remnants of the communist world.
Much the same will happen when the sunny spendthrift euro nations make their excuses and default. The euro is really only a diluted Deutschmark.
As the more financially frivolous fringe economies such as Greece fall away, the euro will strengthen. When the drachma banknote presses in Athens start running again, any Brits with a pocketful of the newly hardened euro will suddenly find themselves the most popular folk in the taverna.
In a few years (months? days?) the Greeks will introduce a new drachma, cutting costs for visitors and allowing us to explore the birthplace of European civilisation even more exuberantly than we do this fine summer.
Could you inadvertently cause a holiday firm to fail?
Low holiday prices, much as we love them, pose a couple of serious drawbacks. The first is that they point, next summer, to less choice and higher prices. The package-holiday companies make losses for most of the year, which they traditionally tolerate because of the big profits they make while the sun shines during the school holidays.
Tour operators offering August holidays to Corfu for £250 or less are probably selling at a loss. Expect significantly fewer package holidays next summer, especially cheap self-catering deals.
Next, by paying a bargain-basement price you could inadvertently help the holiday company into an early grave. A familiar summer phenomenon is for weak travel firms to sell below cost in a bid to keep cash flowing in. As that trick cannot be sustained, the company goes bust, whereupon some travellers learn their holiday is not protected.
To avoid dismay, ensure you book a real package holiday, covered by an ATOL, rather than buying flights and accommodation as separate transactions. Then, if it all goes wrong, you'll be all right.
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