Czech Tourists Face Higher Vacation Costs Except in Egypt

The purchasing power of the Czech koruna has declined in most popular tourist destinations compared to last summer. When factoring in both currency exchange rates and inflation, expenses are only slightly cheaper in Egypt, according to calculations by consulted economists.

Tourists planning a summer vacation abroad will mostly pay more this year. The Czech koruna has weakened against several currencies over the past year, including the euro, US dollar, Bulgarian lev, and Polish zloty. It has also lost slightly in value against the Hungarian forint. For example, the koruna has depreciated by 5.5% against the euro and nearly 7% against the dollar over the past year.

Although the koruna has strengthened by about 15% against the Turkish lira, this is far from enough to offset Turkey’s inflation rate, which has exceeded 75%. This results in an overall increase in costs for Czech tourists traveling to Turkey.

Egypt is the only country where costs have decreased compared to the previous year. Despite Egypt’s inflation rate reaching a significant 28.1% year-on-year, this has been offset by a 43.8% appreciation of the koruna, leading to a real increase in purchasing power of 12.3%.

In Egypt, tourists can save money on purchases in supermarkets or local markets, although Western currencies are preferred in many places, particularly tourist zones. “The tourism sector in these countries has largely switched to euros and dollars, so opportunities for cheaper vacations will be limited,” commented Antonín Hudec, a currency trader at Roklen. For tourists staying at all-inclusive resorts in Egypt, the trip cost is more significant than spending money locally.

Despite assurances from travel agencies that they are not raising prices across the board, the latest official data from the Czech Statistical Office shows that vacation costs have increased by more than 8% year-on-year as of May. Analysts believe the Czech koruna was unusually strong last year and has weakened due to reductions in interest rates by the Czech National Bank.

Most consulted economists suggest that Czechs should not delay purchasing foreign currency. “Interest rates from the Czech National Bank are expected to drop, which means the koruna may weaken slightly. While short-term fluctuations towards stronger levels can’t be ruled out, they won’t be substantial. The sooner Czechs buy foreign currency for their vacation, the better,” advised Tomáš Volf from Citfin.