On Monday and Tuesday, the British Pound plummeted in value against major currencies, including the Turkish Lira. This is due to fears that the UK could exit the European Union.
A possible British exit from the EU hit the headlines on Sunday when the British Government announced the date for the in /out referendum.
The British media have coined a phrase for the possible British Exit as “BREXIT”, similar to the threat of the Greek exit or “GREXIT” from the EU that was so prevelant last year.
Voters will be able to take part in the referendum on 23 June.
The news of the referendum has triggered the biggest slide in the value of the British currency since 2010.
What started on Monday continued into Tuesday with Sterling slipping and sliding managing just 1.40 USD by the end of Tuesday.
But Sterling also lost value against other currencies too.
It traded at just 4.12 Turkish Lira (TL) by the end of Tuesday bringing it to a value not seen July 2015.
At the close of business last Friday it was trading at 4.25 TL.
The Euro has also suffered because of the news with the financial markets hedging their bets that an exit could be bad for the EU economy too.
BREXIT Fears Bad For Holidaymakers Spending Power
The weak Pound may be positive for exporters who will be able to sell their products for less abroad, but holiday makers will have less bang for their Pound when they venture abroad for their holidays.
This is in stark contract to last season when the Pound was enjoying near record high values against many currencies, such as the Euro and Turkish Lira, something that made the relevant holiday destinations even better value.
We wrote about this in several articles; however, some comments left on our site complained that many establishments in the local resorts had increased their prices to match the exchange rate – making hay whilst the sun shone.
The test for the holiday industry this year will be how they respond to this devaluation in the spending power of visitors and how they will cut their cloth to attract the tourist Pound to their hotel, restaurant or excursion in 2016.
What do you think could be done? Leave your comment below.