Pound v Euro, How Much Has it Really Cost You?
There has been much discussion of the post B-word effect of Sterling and Euro exchange rates.
The tourism industry in the med, including Ibiza, is certainly fearful. Hotel and travel industry bosses frequently ask for opinion on whether our country-folk will continue to travel abroad with less buying power at their disposal.
It is an issue that I am sure many travellers have considered, but my response has always been that the weather, not exchange rates is more of a factor. If Britain has a few hot summers, that might make a dent. But until then they can rest assured that the British and Irish will continue in big numbers to do everything possible to get at least one annual dose of summer sun.
But that is not to say tourists feeling the effect might make their holidays a little shorter, or dropping a hotel star to keep the price reasonable. In Ibiza that means 5 star to 4 star as it’s all we’ve got.
Another point I will put to those fretting in the industry is that Ibiza may well be shielded from the effects of the exchange rate slump more than many other destinations, because of its unique clientele.
It seems reasonable to suppose that family of four with a mortgage, expenses, and baby on the way, is going to be affected by exchange rates far more than a 24 hour party person who’s responsibilities extend to their iPhone and assuaging the demands of an insta’ following.
When I came to Ibiza back in the day I cannot ever recall knowing what the exchange rate was, or even an inkling if it was high or low. I just got on a plane with a debit card in one pocket and a credit card in the other. Getting home with available funds on either was an unexpected bonus, and also reason for some regret thinking what I might have missed in not having blown all my funds. The point is that a significant group of people just don’t care, and Ibiza has a higher ratio of those people than most other places. Kind of ironic that the island seems determined to rid itself of just those people, but we won’t go into that here.
Whether you fall into the group of people who care about exchange rates or do not, we thought it might be interesting to see what affect the fluctuations have really had over time.
To do so we will use a ‘typical’ Ibiza holiday shopping basket, and considered the effects of pound sterling purchasing power from then to now. It should be noted that it will not be undertaken in an entirely serious manner, but you can get some reasonable data from it if you want to.
The Big Gap
There was a time when the pound was so strong against the Euro that it was cheaper to go on holiday than stay home. Back in the heady heights of 99/00 the Millennium roll spiked at a pound buying 1.73 euros. Living the dream.
The B-Word Gap
Those days have long gone and so we will apply our costings to a more short term timescale—from Brexit to the present day.
Ibiza Price in Your Pocket
Bottle of Hierbas, 16€
- 2016: £100 would get you 8.6 bottles of the drink you fell in love with in Ibiza
- 2019: The same £100 would get you 7 bottles now
- Comment: Sure, that is a lot of Hierbas wasted, but the friends you bought it for won’t like it anyway.
Small Water in Nightclub, 10€
- 2016: £100 back in 2016 would get you 13 tiny bottles of water.
- 2019: Now the same money would buy 11.
- Comment: You’d have felt totally shafted back in 2016, and you still will today. No change.
- 2016: £150 would get you 8 cocktails at some swanky joint
- 2019: Now your £150 would buy you 7
- Comment: Now we are getting somewhere. The best summation of the cost of the B-word exchange rate slump. You were getting every 8th Cocktail for free, now it’s gonna cost you.
Refused Entry at a Nightclub FREE
- 2016: Free
- 2019: Free
- Comment: This option will appeal to those on a budget. Beat the Brexit blues by getting so blitzed nowhere will let you spend your money anyway. Note: You will have lost all your money by morning.
Breakfast at Johnny’s, Cheap
- 2016: A full English breakfast with tea and toast would cost you £4.20
- 2019: In 2019 that same plate of deliciousness would cost you £4.95
- Comment: Come on now, it is a huge breakfast, double English sausage and everything, and you are moaning about 75p, get a grip.
As you can see, there certainly is an ‘in your pocket’ price difference, and it is perhaps well summed up as every 8th Cocktail free. Before the Brexit vote you would get one free Ibiza cocktail for every 8 you buy now.
Would that put many people off? I don’t think so. Far more likely they will be put off by some of the barmy regulations being enforced on the island and its tourism. Issues such as banning alcohol as part of an all inclusive holiday, draconian restrictions on off duty sales and opening times, and many more.
In my humble opinion, your average British Tourist won’t be so much bothered about the price of a drink, as whether or not they are allowed to buy one.