Kiwis make most of high-flying dollar

Destinations such as London and the United States - once considered notoriously expensive for the average Kiwi tourist - have become much more affordable thanks to the strong NZ dollar. Photo / Supplied

The cost of long-haul travel is plummeting as the kiwi continues to soar.

The New Zealand dollar reached US82.6c on Monday, a rise of 11c since mid-March. A British pound is now worth only $2.

As a result, travel agencies are reporting hordes of New Zealanders departing for European and American holidays - 15 per cent more than usual in April and May.

Flight Centre executive general manager Mike Friend said long-haul sales had "gone through the roof" due to the attractive currency conditions and the growing number of airlines flying out of New Zealand.

The high New Zealand dollar does not directly affect the price of airfares. But carriers are responding to the high demand for long-distance flights from New Zealand, which results in more seats and lower fares.

Some of the cheapest flights have been placed on the market. Last month, Malaysia Airlines was offering return flights to Europe for $1465.

The strong kiwi transforms the costs on the ground, in particular in the US. House of Travel says New Zealanders are staying longer overseas, and ditching motels and hostels for four-star hotels.

The Weekend Herald looked at how New Zealanders could capitalise on the high dollar and travel to the United States and Europe.

United States

Auckland-Los Angeles airfares, four nights' accommodation, Disneyland trip - $3145 per adult, $2099 per child (House of Travel)

Agencies are promoting the United States as an ideal destination for families, because the kiwi's strength against the greenback has lowered the price of accommodation, food and activities.

The cost of flying across the Pacific far outweighs the prices faced once on the ground in Los Angeles. A family of four can pick up a cheap breakfast, lunch and dinner for $80. But some airlines are offering $1800 return flights and five nights' accommodation to Los Angeles if the package is booked this month.

Flight Centre retail leader Maree Hansen said: "We are noticing Kiwis venturing that little bit further to Hawaii and LA ... America used to be a more costly holiday option, but now accommodation, sightseeing, eating out and shopping are so much more affordable.

"While prices in the States haven't changed, our strong dollar means Kiwis can get so much more bang for their buck."

A study by online travel group Expedia showed that US cities had the third best-value coffee out of New Zealanders' popular places to visit, bettered only by Fiji and Bali.

Los Angeles also had some of the most reasonably priced beer, which was cheaper than in London, Paris, or Rome.

For the shoppers, a pair of Nike running shoes cost around $98 in the US, compared to $163 two years ago.

A restaurant dinner in downtown Los Angeles will set a traveller back $61 per head, at least $40 cheaper than in the depths of the recession.

Someone who picks up two slices of pizza and a Coca-Cola opposite the Empire State Building in New York will have to stump up only $6.

At the wax museum Madame Tussaud's Hollywood travellers will pay $30, compared to $50 two years ago.

A day at Disneyland for a family of four will cost $372, compared to $608 in 2009.

There is good news too, for tourists wanting to hire a rental car - filling the tank will cost them two-thirds of the normal price.

Britain

Airfares, accommodation and two nights in London: $2289 (stopover in Seoul) (Flight Centre)

New Zealanders who make the day-long flight to London can now afford to stay long enough for the jetlag to wear off.

With the New Zealand dollar buying 50p in the capital, the notoriously expensive city will no longer swallow tourists' savings. The kiwi is also performing well against the euro.

A £2 coffee in London in March 2009 was the equivalent of $5.90. But a flat white in Soho today will set a New Zealand traveller back $4.

A round of beers in Shepherd's Bush will cost you $24 instead of $36.

To visit the London Eye on the Thames, a standard ticket is $32, compared to a normal price of around $50.

House of Travel spokesman Brent Thomas said that travellers to Europe could afford to move between more than one country, and carry out several activities. "Instead of doing a coach tour, they're doing a coach and a cruise. Or they're staying in Tuscany for a few days, then taking a cruise to another country.

"People are also tending to move from three-and-a-half-star hotels to four-star hotels. So they're increasing their stay, or the quality of their stay."

London can still bleed travellers dry in other ways - a study by Expedia found a five-minute phone call home from a London hotel can cost up to $68.80.

The city does, however, have some of the cheapest internet access in Europe, at around $5 an hour.

Mr Thomas said that with the US feeling the economic pinch, fewer Americans were travelling to Europe, which meant there were more deals on offer for New Zealanders.

For those wanting to venture beyond London, the kiwi is also performing strongly against the Turkish, Polish, Russian and Croatian currencies.

Great time for holiday abroad

The kiwi's performance against the Argentinian peso and the Turkish Lira make those two less-typical destinations the cheapest for New Zealanders to visit this winter.

Analysts say New Zealand's unprecedented high against the greenback is also reflected in other currencies, leading to good value in less-traditional holiday destinations.

The New Zealand dollar has appreciated dramatically against the Argentinian peso, gaining 15 per cent since March last year. Strong gains against the Turkish currency and Hong Kong dollar also make those destinations far more affordable.

Europe usually dominates the on-line travel Expedia list. The Continent claimed eight of the top 10 spots in last year's index.

Despite not making the top 10 list this year, several countries in the eurozone still provide good value for money - the kiwi dollar has recently appreciated against the Danish, Latvian and Hungarian currencies.

Value for your dollar

Best-value destinations for the New Zealand dollar. (Gain against NZ dollar in past 12 months)

1. Argentina (peso): +15.4 per cent

2. Turkey (lira): +9.44 per cent

3. Hong Kong (dollar): +8.06 per cent

4. India (rupee): +7.11 per cent

5. United States (dollar): +6.67 per cent

6. Poland (zloty): +6.08 per cent

7. Croatia (kuna): +3.89 per cent

8. Russia (ruble): +3.84 per cent

9. Philippines (peso): +3.34 per cent

10. Canada (dollar): +3.03 per cent

Source HiFX: Year to March 31, 2011