The cheapest destinations this summer (1 July - 31 August 2022) for seaside holidays in the European Mediterranean* are Greece and Turkey, closely followed by Spain. In all three cases, the pricing policy of the resorts is related to the economic condition of the countries concerned. Greece and Spain have traditionally been bothered by high levels of unemployment, which have been exacerbated by the impact of the coronavirus pandemic, while Turkey is struggling with staggering inflation, which is weakening the currency and reducing the cost of travel for foreign tourists. This follows from a comparative analysis carried out by the CapitalPanda broker based on macroeconomic data and price comparisons in the online booking systems of the largest German travel agencies (TUI Deutschland, DER Touristik, FTI). The results can also be compared on a price map.
A surprise may be the prices of summer holidays in Croatia, which for a long time had the label of a cheap but attractive country. However, this picture has been changing for some time now and Croatia is becoming a standard tourist destination, even in terms of price. On the contrary, one of the most expensive summer holiday destinations is the Côte d'Azur in France. This can be explained, among other things, by the fact that the hoteliers there target a differently economically situated clientele than the traditional resorts, which mainly target the middle class.
With the exception of Croatia and Turkey, all selected destinations are located in the euro area. This means that holiday prices in Croatia and Turkey may be subject to exchange rate fluctuations in local currencies against the euro. However, in the case of Croatia, the probability of a significant fluctuation of the kuna's exchange rate against the euro is disproportionately lower than that of the Turkish lira. The Turkish economy has been plagued for several years by double-digit inflation, which has increased dramatically in recent months. In April, the year-on-year inflation rate climbed to almost 70 percent, while a year ago it was around 16 percent.
For this reason, a further weakening of the Turkish lira can be expected. However, it is not entirely clear to what extent this will be reflected in the final prices of summer holidays, as the exchange rate difference deviating in this direction represents a potential profit for the travel agency. However, it can be expected that the travel agency will share the potential exchange rate gain with the client. In any case, it is an exchange rate risk that has a potentially positive impact on clients.
Tourism is one of the sectors most affected by the coronavirus pandemic. After two years of virtual "tourist lull", traditional seaside resorts are coming to life. And hand in hand with this goes the price trend. While tourism prices in the euro area fell by an average of six percent during the coronavirus pandemic, the exact opposite can now be expected.
CapitalPanda analysts mapped prices in popular destinations for the most frequent stays (7 and 10 days), different types of meals (breakfast, half board, all-inclusive) and also according to the number of stars of the hotel in which it is possible to spend the stay in the given locality. Among the other criteria, the shortest possible distance to the beach or the presence of a swimming pool within the resort was chosen. In all cases, the prices include air transport and correspond to the period from 1 July to 31 August, i.e., the period of the summer school holidays. Prices are the result of weighted averaging and, of course, may differ from the average when selecting a particular offer.
*In addition to selected resorts in Greece, Italy, Croatia, France, and Spain in the Mediterranean, the so-called Turkish Riviera and the Canary Islands have also been included in the comparison