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Holiday companies starting to feel the chill of the UK exchange rate

As we enter January, one of the more important months in the holiday sector, we are already seeing reports that the collapse in the UK exchange rate against the likes of the dollar and the euro is affecting the future destination of UK travellers. Indeed many travellers have only now realised the substantial reduction in their spending power overseas and more and more seem to be reconsidering their positions.

Initially there had been a thought that holidaymakers would look towards the likes of Egypt and Morocco where there is still significant spending power for the UK pound but the initial numbers are not encouraging. When you consider the reduced spending power of sterling together with a slowdown in the UK economy we are seeing something of a two-way squeeze for the UK consumer. Many believed that the annual holiday would be one of the last luxuries to fall in the UK and unfortunately it looks so we may well have reached that point.

Reduced activity levels would place yet more pressure on the holiday companies which are still trading and a downturn in business levels could also reduce consumer confidence. Once confidence starts to wane, it can be very difficult to retrieve this vital element of any business market.

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