A strong dirham, a strong dollar and lower oil prices combine to make a nightmare scenario for economists, but together, they’re a window of opportunity for UAE residents looking for a holiday break abroad this Eid Al Adha.
For the first time in more than a decade, the euro is almost equal in value to the dollar, making European cities cheaper for UAE residents who want to book a last-minute holiday.
The dirham’s peg to the dollar — at the rate of Dh3.67 to $1 — means all changes in the price of the dollar relative to other currencies impact the dirham’s purchasing power.
The euro has dropped 15 per cent to the dollar over the past year, says Nikola Kosutic, Research Manager at business intelligence firm Euromonitor International.
The weaker euro means UAE travellers can take longer holidays in popular hotspots such as Paris, Munich and Venice, analysts say. “The strengthening of the dollar against the euro is certainly making travel to Europe more appealing for not only UAE residents but the wider GCC, especially as we approach the end of the summer months and Eid Al Adha,” Christopher Hewett, Associate Director at hospitality firm TRI Consulting, tells GN Focus.
With national carriers Etihad Airways and Emirates Airline also offering special discount fares to several European and Asian destinations between September and December on the back of low oil prices, travel operators in the UAE say they are witnessing strong enquiries for bookings to European destinations as people look to lock in on favourable exchange rates.
“We have definitely seen a spike in travel to Italy, Greece, Portugal as well as Scandinavian countries like Sweden and Iceland, and have sold our quotas on flights to Italy during the coming Eid break,” says Premjit Bangara, General Manager — Travel at the Sharaf Travel agency.
He adds that the Far East, particularly Thailand, Malaysia, Singapore and Hong Kong, retains a strong level of interest for people travelling from Dubai.
Travellers also have more money to spend. Andrew Prince, Financial Planner at wealth management firm DeVere Acuma, says UAE residents travelling overseas will feel a little richer this month. “In September 2014, for every $1,000 of spending money taken to Europe, you would have received €770 [about Dh3,174]; this September you can get €900. That’s a 17 per cent increase, or an extra €130 in your pocket,” he explains.
“In certain cases, travellers will [also] take the opportunity to book higher-quality rooms such as suites and executive rooms as well as spend more on shopping and entertainment.”
A strong dirham will benefit travellers to the UK, where the pound has slid in value against the US dollar (albeit not to the same extent as the euro), as well as those looking to make the three-hour hop to India. The rupee is trading at a two-year low against the greenback, and now hovers around Rs18 to a dirham as compared to Rs15.8 last May. Similarly, the Sri Lankan rupee was trading at 37.5 last week, versus 35.8 in 2014.
So if you’ve been yearning to escape the summer heat, now’s the time to
do it.
