High Dollar Holiday Hedging

Media Release
30 March 2005

High Dollar Holiday Hedging

A swing back to longer US stopovers and a surge in North American holidays are the two main effects on traveller behaviour due to the high New Zealand dollar, according to New Zealand’s largest travel retailer.

But in a nationwide survey on the effects of the high dollar on travel, Flight Centre consultants also identified an attitude to currency fluctuations among New Zealand travellers that was more sophisticated than ever before.

With many commentators picking that the NZ dollar has now peaked at around the US 74c mark, several Flight Centre consultants noticed holiday hedging - travellers buying up US dollars for future trips.

Shore City Flight Centre consultant Thaddeus D'Souza said his clients were “buying US cash by the bucket load,” while other agents noticed people booking flights and accommodation further in advance because of the possible drop off in the dollar.

Flight Centre Albany consultant Scott Liddell said destinations with currencies pegged to the US dollar, such as Malaysia, had also gained in popularity.

In the Pacific, Nelson Flight Centre manager Matt Roberts said Hawaii was also popular right now, as people looked for alternatives to the traditional Fiji holiday.

Browns Bay Flight Centre Consultant Paul Dymond was typical of responses when he said many New Zealanders were simply stopping over for longer periods on their way to Europe, with many upgrading to better hotels because of the exchange rate.

According to Statistics New Zealand, for the period July 2004 – January 2005 the number of New Zealanders travelling to the US for a holiday or visiting friends and family increased by 18.8 percent against the same period the year before.

Flight Centre general manager David Burns said the high dollar also coincided with travellers becoming used to the increased security measures now in place in the US, and a push by tourism operators such as Disney to encourage more tourism business from this part of the world.

“Flights to North America are also cheaper than ever before, although this is being offset somewhat by the fuel surcharges,” he said.

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