Kiwis flock to fly on strong dollar

By Morgan Tait

Cost of international flights and buying power overseas have travelling New Zealanders buying up a storm.

Naomi Somervile and Adam Booth are keen travellers and say their buying power has grown. Photo / Richard Robinson
Naomi Somervile and Adam Booth are keen travellers and say their buying power has grown. Photo / Richard Robinson

Kiwis are riding the strong New Zealand dollar overseas and using their newfound purchasing power to enjoy more sights and experiences while they are there.

The country's economic growth, tipped to outpace most other developed nations this year, is good news for Kiwis travelling abroad and many New Zealanders are already taking advantage of strong currency conversion rates.

Travel industry experts say they are taking more bookings and inquiries and watching New Zealanders get more "bang for their buck".

A Herald comparison of the prices of a range of consumer purchases overseas showed buying a latte from Cafe Munich in Germany costs about $5.70 today, but when converted at 2009's exchange rate the same drink would cost $8.40.

We compared Wednesday's conversion rates - with the New Zealand dollar at US83c, 61c against the euro and 50p against the pound - with the same date in 2009.

Going out for a plate of international restaurant chain Wagamama's Teriyaki Beef Soba noodle dish would cost $26.07 at today's prices, but $38.28 at 2009's exchange rate.

Taking a ride on a double-decker bus in London costs $4.80 now, but $6.24 at 2009 rates.

Someone wanting the latest model iPad would have to pay $909 at electronics giant FNAC in Paris at 2009 conversions, but just $620 now.

Flight Centre general manager Simon Mckearney said business and customer inquiries were up 20 per cent on the same time last year.

"It's brought back into the marketplace more travellers," he said. "Year on year our sales are significantly up and ... it's not just us, all our competitors are doing the same.

"Travel is cheaper with the Aussie and US dollar both in great shape [for those with Kiwi dollars], so people know they are going to get a bigger bang for their buck once they get overseas."

He expected interest to rise in February and throughout the year.

Tour companies Contiki and Trafalgar, which take groups around Asia, the UK, Europe and the US, were experiencing a 15 per cent increase compared to the same time last year.

Contiki general manager Tony Laskey said more young people were travelling, especially to Australia, Asia and the Americas where the Kiwi dollar performed best.

"Absolutely more young people are travelling because we've got a strong dollar," he said. "Our Europe inquiries and bookings are up, but when you look at somewhere like the States or Australia, our bookings are up even more."

Trafalgar general manager Scott Cleaver said the value of the Kiwi dollar was changing what New Zealanders chose to do on their travels.

"Everyone sees the UK as a destination now that is more affordable. You used to buy a cup of coffee in London that was the same in pounds as it was in dollars, so it was always this horrendously expensive exercise, but people don't view it that way now.

"Pricing, particularly outside of London, seems to have dropped a little bit and obviously with the strength of the dollar it means for the first time in a long time we feel we can get some value there."

Mr Laskey said New Zealanders were making the most of their purchasing power.

"Our tours in the States, when we go to factory outlets and things ... our Kiwi clients are shopping up a storm - three pairs of jeans, five pairs of running shoes, it's incredible how much they are spending on shopping and other activities because our dollar is so strong."

Mr Cleaver agreed. "It gives a confidence. It's more a feeling that we can go and do more and enjoy it and feel that our money goes further."

Mr Laskey said it was hard to compare Contiki's price changes with previous years, as packages now included more.

"It used to be just transport, accommodation, your breakfast and half your evening meals. Now there's a whole lot of other stuff included.

"In the States we include things like a catamaran cruise on San Francisco Bay, a Hummer ride down the strip in Vegas and all these things we have been able to add in because of the strength of the currency. Clients get a lot more."

Air travel costs down

The price of international flights is getting cheaper, economists say.

In the year ending November, nearly 2.2 million short-term overseas trips were taken by Kiwis compared to 1.9 million in 2009, Statistics New Zealand data shows.

In the same period, the price of flights dropped considerably, said New Zealand Institute of Economic Research principal economist Shamubeel Eaqub.

A Herald comparison of Flight Centre pricing schedules from previous years showed savings of hundreds of dollars.

Travelling to Paris return from Auckland would have cost $2125 when adjusted for inflation in 2013 dollars. In 2013, the same trip would have cost just $1785 - $340 less. Getting to London and back from Auckland was now $239 cheaper.

Mr Eaqub said there were a range of factors at work making travel cheaper for jet-setting Kiwis.

"In real terms and relative to incomes, [prices] have been falling so international airfares have become more affordable," he said.

Statistics New Zealand's consumer price index showed the price of international air travel in the December 2009 quarter had increased 19 per cent; in the same quarter of 2013 prices had increased 9.2 per cent.

Mr Eaqub said businesses were also competing to bring back customers who disappeared during the recession.

Big savings on couple's overseas trips

Naomi Somerville and Adam Booth are paying $1000 less for flights to Ireland than they paid for the same trip a year ago.

The Auckland couple are heading for a three-week trip to the Emerald Isle for a wedding in March, and were surprised to find they were saving so much.

Flights that previously cost them $2300 each were now just $1700, said Ms Somerville.

"We were really lucky, I had my eyes on the internet every day and was checking," she said.

"It was a bit of a fluke really, we didn't know that it was going to cost this much," said Mr Booth. "We travelled over there for Christmas in 2012 and it could have been that time of year playing a part but basically we are saving a lot."

The couple, both in their 30s, said they had noticed their purchasing power increase in foreign countries in recent years.

"The money difference goes a lot further over in Ireland and I have found things are a lot cheaper over there in general which helps," said Ms Somerville.

Mr Booth noticed the biggest difference while visiting Bali last year, compared to a 2012 jaunt to Thailand.

"We got a good deal for Bali as well, but we had been to Thailand a year prior and after comparing the prices ... it was way cheaper - clothing, food, everything."

- NZ Herald

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