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This Year's Cheapest Holiday Destinations

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Where to go on holiday this year? It's tempting to simply reply: anywhere hot. But one of the key factors in your decision should be exchange rates. That's because sterling has taken a kicking in the international currency markets over the past 12 months, and is down by 4% against the Euro and 5% against the US dollar.

That drop is affecting both the cost of your holiday abroad and the value of your spending money. And it's not just Europe and America that are affected: many hotels in regions such as the Caribbean, South East Asia and the Indian Ocean set their rates in US dollars. A strong greenback means higher prices for Brits.

This is particularly unwelcome news as the UK economy festers in the doldrums and household budgets feel the financial pinch. However, by selecting your destination with care you can drastically reduce the price of your next holiday.

Here at 101 Holidays we commissioned some research which found that some popular destinations are markedly cheaper than at this time last year. In South Africa, for example, your pound will buy 16% more rand than 12 months ago. Argentina and Japan are 10% less expensive than they were in 2012.

On the other hand, some countries are going the wrong way. Sweden - already an expensive destination - has got 10% pricier over the past year. Neighbouring Norway is up by 4%, while prices in Iceland rose by 5%.

The best deals in 2013

According to our survey, the best short-haul destination this year is Egypt with prices 6.5% less expensive than a year ago. This comes at a time when the entire Egyptian tourism industry has been badly affected by publicity surrounding the Arab Spring, with many hotels offering deals. At tourist sites such as the pyramids in Cairo and the Valley of the Kings in Luxor, the usual crowds have vanished. This is, in short, a great time to visit Egypt. Just make sure you avoid the sweltering hot months of summer.

Further afield, South Africa is a great-value destination, once you've paid for the airfares. Sure, you'll find expensive five-star hotels but prices on the ground are very reasonable and this could be a good time to treat yourself to a safari. Just remember that you won't find sweltering weather in their winter (our summer).

We also like the look of Japan this year. Although it has a reputation for being expensive, it's possible to find modest hotels with lots of character - particularly outside the big cities - at very sensible prices. And eating out is surprisingly cheap in Japan. This is partly because many Japanese eat out every day (some commuters eat out three times a day) creating a plethora of cheap restaurants all serving great food.

Argentina is another destination worth considering. Although airfares are not cheap, prices on the ground are sensible. The food is outstanding and you'll find well-priced hotels across the country. Basic Spanish will be a help once you get out of the main tourist centres.

Read between the lines

There is, of course, more to finding value than simply looking at which currencies are up and which are down. The Thai baht, for example, has strengthened against sterling by 8% over the past 12 months. But Thailand remains far from expensive. There is a vast range of accommodation for every budget, much of it high quality, and food and transport are both cheap.

On the other hand, Switzerland has fared relatively well over the past months. It is only 1.8% more expensive than a year ago. However, nobody with any sense would expect Switzerland to be cheap. It's not.

It's a similar story in Australia. Although it only got 3% more expensive over the past year, the Aussie dollar has been steadily rising against sterling over a number of years. Historically, now is an expensive time to visit.

* Mark Hodson is editor of 101 Holidays

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