ANALYSES

BANK AUSTRIA ECONOMICS & MARKET ANALYSIS AUSTRIA

July 2015

Purchasing Power of the Euro Abroad

HolidayEuro Summer 2015

Analyses

Holiday€uro Summer 2015

Bank Austria Economics & Market Analysis Austria page 2

Overview

“Holiday€uro” worth more in Europe in 2015, butmuch less overseas

● Holiday€uro worth more in Europe due to higher Austrianinflation

● Yet overseas it is worth roughly 15 percent less thanks toweaker euro

● Hungary, Turkey and Croatia top list of main destinations

● Holiday€uro worth roughly the same in USA as in Austria,but some 10 percent less in UK

● Switzerland remains the most expensive holidaydestination by far

Author: Stefan Bruckbauer

ImprintPublished by UniCredit Bank Austria AGEconomics & Market Analysis AustriaSchottengasse 6-81010 WienTelefon +43 (0)50505-41951Fax +43 (0)50505-41050e-Mail: econresearch.austria@unicreditgroup.at

July 2015

Analyses

Holiday€uro Summer 2015

Bank Austria Economics & Market Analysis Austria page 3 July 2015

In detail

There is no clear-cut trend for the value of the Holiday€uro for Austrians in 2015. In summer2015 the Holiday€uro is worth the same as last year on average. But if we look at theHoliday€uro on long-haul trips, it transpires that it is worth around 17 percent less in thesecases. In this context there are two different trends this year with the most popular holidaydestinations. On the one hand, the Holiday€uro has gained in value on average in the eurozonecountries compared to Austria – a consequence of the higher inflation in Austria. On the otherhand, in countries that don’t have the euro, the HolidayEuro has lost considerable value forAustrians as the euro has markedly depreciated. The HolidayEuro benefited in many eurocountries from the lower inflation than in Austria, while in the non-euro countries it sufferedfrom the depreciation of the euro.

Among the main holiday destinations for Austrians, holidaymakers from Austria currently getmore for their Holiday€uro in Hungary and Turkey. They also stand to get noticeably more inCroatia, Slovenia, Greece and Portugal than in Austria. Those spending their holiday in the USAthis year can expect prices to be similar to Austria, while one year ago prices were roughly one-fifth cheaper. In many countries of Eastern and South-eastern Europe the Holiday€uro is alsoworth much more than in Austria, first and foremost in Bulgaria, Romania and Poland, and thisadvantage has even increased slightly compared to last summer. In Greece the Holiday€uro thisyear is worth around 20 percent more than in Austria, having gained another 3 percentcompared to the previous year. This is the result of falling prices in this country. Since the startof the crisis in 2008 the value of the Holiday€uro for an Austrian holidaymaker in Greece hasthus risen by around five percent.

Overseas the somewhat higher inflation in Austria barely plays a role when comparing the valueof the Holiday€uro, here the exchange rate trend is more important. The depreciation of theeuro since the summer of 2014 has significantly reduced the value of the Holiday€uro overseasfor Austrian tourists; this year you get around 17 percent less than in the previous year. In Asiain particular but also in Africa we have seen a sharp decline in the value of the Holiday€uro,while the weaker euro had less of a negative impact in Latin and Central America because thesecurrencies also lost value. The difference in countries like Brazil or the Dominican Republiccompared to the previous year is small on average, but it amounts to 20 percent in Mexico. If

Source: Bank Austria Economics & Market Analysis Austria (own estimates), OECD, Eurostat, Statistik Austria, July 2015

Hu

nga

ry

Turk

ey

Cro

atia

Slov

enia

Gre

ece

Por

tuga

l

Spai

n

Ger

man

y

Fran

ce

USA

Ital

y

Aus

tria

Can

ada

Un

ited

Kin

gdom

Swit

zerl

and

Tota

l

0

20

40

60

80

100

120

140

160

180

200

On holiday, EUR 100 are worth

Analyses

Holiday€uro Summer 2015

Bank Austria Economics & Market Analysis Austria page 4 July 2015

someone spends their holiday in the United Kingdom they will find this year that theirHoliday€uro is again worth a little less than at home, whereas last year it was worth 9 percentmore. Holidaying in London will show that the Holiday€uro is worth noticeably less than inAustria for the first time this year, and roughly 12 percent less than one year ago. The sameapplies for a holiday in Canada.

Taking a holiday in Switzerland is still expensive, where 100 Holiday€uros are now worth just59 euros – the sharp appreciation in the currency cannot compensate for the deflation inSwitzerland. As an alternative to Switzerland, but also to Austria, the Holiday€uro would beworth slightly more if holidaying in Germany or Spain, but this is perhaps less noticeable andtoo small to compensate for the longer journey. The Holiday€uro is definitely worth less than inAustria if going to Ireland and Sweden.

In conclusion we point out that these are average figures, and individual areas (such as Londonas a central region) can differ. The price levels relate to averages of goods and services in theindividual countries; individual products (particularly for tourists) can deviate from thesesignificantly. This is why no values were given for long-haul destinations, only the changes inthe figures. Furthermore, the fact that the price levels are so much more affordable in someholiday destinations than in Austria is primarily due to the high income level in Austria. If theprice level were lower in Austria, the income level would also be lower and holidays would bedifficult to afford.

Destination Popularity 1) Jul-15 Jul-15 - more exp.

+ cheaper 2)

compared to previous year

in %

Austria 100 100

Italy 22% 103 101 1%

Croatia 15% 139 138 1%

Germany 9% 106 105 1%

Spain 7% 111 109 2%

Turkey 4% 163 168 -3%

Greece 4% 119 115 3%

France 4% 105 104 1%

United Kingdom 3% 91 101 -12%

Hungary 3% 168 162 4%

Switzerland 2% 59 67 -14%

Slovenia 1% 124 121 3%

USA 1% 103 124 -21%

Portugal 1% 118 117 1%

Canada 0% 94 99 -5%

Total 3) 73% 116 116 0%

*) EU-25 countries excluding hous ing costs1)

Percentage of holidays abroad longer than 4 days taken by Austrians2)

Compared to Austria 3) Only the most important countries

EUR 100 are worth EUR ... in this

country

On holiday, EUR 100 are worth

Comparison of Purchasing Power *)

Source: Bank Austria Economics & Market Analysis Austria, OECD, Eurostat, Statistik Austria

Analyses

Holiday€uro Summer 2015

Bank Austria Economics & Market Analysis Austria page 5 July 2015

Source: Bank Austria Economics & Market Analysis Austria, July 2015, preliminary data

Changes in the " Holiday€uro"(June 2013 over June 2012, in %)

Hungary 3.8%

Greece 3.3%

Slovenia 2.6%

Spain 2.2%

France 1.2%

Italy 1.1%

Portugal 1.1%

Germany 1.0%

Croatia 0.9%

Austria 0.0%

Turkey -3.0%

South/Central America -3.5%

Canada -4.9%

United Kingdom -11.6%

Switzerland -14.1%

Asia -17.0%

Overseas average -17.1%

Africa -20.3%

USA -20.7%

(July 2015 over June 2014, in %)

Brazil 5%

New Zealand 5%

Australia 0%

Dom. Republic -1%

Japan -1%

Tunisia -8%

South Africa -11%

Thailand -15%

Overseas average -17%

Mexico -20%

China -23%

Hong Kong -25%

Egypt -27%

Changes in overseas "Holiday€uro"

Source: Bank Austria Economics & Market Analysis Austria

Source: Bank Austria Economics & Market Analysis Austria

Hun

gary

Gre

ece

Slov

enia

Spai

n

Fran

ce

Ital

y

Port

ugal

Ger

man

y

Cro

atia

Aus

tria

Turk

ey

Sout

h/C

entr

alA

mer

ica

Can

ada

Uni

ted

Kin

gdom

Swit

zerl

and

Ove

rsea

sav

erag

e

Asi

a

Afr

ica

USA-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15% Holiday€uro is worth less*)

Holiday€uro is worth more*)

*) Compared to value in Austria

Changes in the "Holiday€uro"(since July 2014 in %)

Pola

nd

Cyp

rus

Rom

ania

Swed

en

Slov

akia

Irel

and

Net

herl

ands

Bul

gari

a Cze

chR

epub

lic

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

Changes in the "Holiday€uro"(less frequently visited countries, since June 2012 in %)

Holiday€uro is worth more*)

*) Compared to value in Austria

Bra

zil

New

Zeal

and

Au

stra

lia

Dom

.Rep

ubl

ic

Jap

an

Tun

isia

Sou

thA

fric

a

Thai

lan

d

Ove

rsea

sav

erag

e

Mex

ico

Ch

ina

Hon

gK

ong

Egyp

t

-45%

-35%

-25%

-15%

-5%

5%

15%

25%

Holiday€uro is worth less*)

Holiday€urois worth

*) compared to value in Austria

Change of Holiday€uro in overseas countries (since July 2014 in %)

Analyses

Holiday€uro Summer 2015

Bank Austria Economics & Market Analysis Austria page 6 July 2015

Destination Popularity Jul-15 Jul-14 - more exp.

+ cheaper

in %

Austria 100 100

Italy 22.1% 103 101 1%

Croatia 14.5% 139 138 1%

Greece 4.2% 119 115 3%

Germany 9.4% 106 105 1%

Spain 7.4% 111 109 2%

Turkey 4.4% 163 168 -3%

France 3.6% 105 104 1%

Hungary 2.5% 168 162 4%

Slovenia 1.4% 124 121 3%

United Kingdom 3.0% 91 101 -12%

USA 1.4% 103 124 -21%

Switzerland 2.0% 59 67 -14%

Portugal 1.0% 118 117 1%

Canada 0.1% 94 99 -5%

Czech Rep. 0.6% 113 113 0%

Ireland 0.8% 91 90 1%

Sweden 0.3% 87 85 2%

Cyprus 0.4% 111 107 3%

Romania 0.6% 154 150 3%

Slovakia 0.6% 138 136 2%

Poland 0.8% 141 136 4%

Netherlands 0.8% 103 102 1%

Bulgaria 158 157 1%

Asia 2.3% 191 - -17%

Thailand 253 - -15%

Japan 103 - -1%

Hong Kong 121 - -25%

China 0.2% 152 - -23%

Africa 3.8% 272 - -20%

Egypt 2.2% 287 - -27%

Tunisia 1.3% 261 - -8%

South Africa 0.3% 201 - -11%

South/Central America 0.8% 195 - -4%

Mexico 154 - -20%

Dominican Republic 236 - -1%

Brazil 0.1% 162 - 5%

Australia 0.1% 82 - 0%

New Zealand 0.1% 92 - 5%

Overseas average 7.0% 229 - -17%

Total1)

116 116 0%

*) For EU countries without housing costs1)

only the most important countries

EUR 100 are worth EUR ... in

this country

On holiday, EUR 100 are worthComparison of Purchasing Power *)

compared to previous year

Source: Bank Austria & Market Analysis Austria, OECD, Eurostat, Statistik Austria

Bank Austria Economics & Market Analysis Austria

Disclaimer ans Imprint

We invite you to visit the economic analyses on Bank Austria´s website: www.bankaustria.at under "Markets & Research" in thesection "Economic Research Austria" or directly at http://www.bankaustria.at/en/about-us-publications-economic-research-austria.jsp

If you would like to receive information on our most recent publications by e-mail, please subscribe to the newsletterBank Austria EconomicNews on the website under following link: https://nlreg.bankaustria.at/reg_econews_e.htm.

If you have further questions, please send us an e-mail toeconresearch.austria@unicreditgroup.at

Disclaimer of liability:This publication is neither a marketing communication nor a financial analysis. It contains information on general economic data.Despite careful research and the use of reliable sources, we cannot assume any responsibility for the completeness, correctness,up-to-dateness and accuracy of information contained in this publication.

The opinions of the authors do not necessarily reflect those of Bank Austria and those of the companies which have engaged theservices of the authors. The information contained in this publication is not to be interpreted as an offer or invitation for the sale orpurchase of securities of any kind. We reserve the right to modify the views expressed in this publication at any time without priornotification. This information should not be interpreted as a recommendation to buy or sell financial instruments, or as asolicitation of an offer to buy or sell financial instruments. This publication serves information purposes only and does not replacespecific advice taking into account the investor’s individual personal circumstances (e.g. risk tolerance, knowledge and experience,investment objectives and financial circumstances). Past performance is not a guide to future performance

The information in this publication contains assessments of short-term market developments. We have obtained value data andother information from sources which we deem reliable. Our information and assessments may change without notice."

Imprint.

Disclosure according to Sections 24 and 25 of the Austrian Media Act (Mediengesetz - MedienG):Published by:UniCredit Bank Austria AG1010 Vienna, Schottengasse 6 – 8,which is also the media owner.Business objective: credit institution pursuant to Section 1 (1) of the Austrian Banking Act (Bankwesengesetz)Persons authorised to act on behalf of the media owner (Management Board):Willibald Cernko (Chairman of the Management Board), Carlo Vivaldi (Deputy Chairman of the Management Board), HelmutBernkopf, Mirko Bianchi, Dieter Hengl, Jürgen Kullnigg, Doris Tomanek, Robert Zadrazil.Supervisory Board of the media owner:Erich Hampel (Vorsitzender des Aufsichtsrates), Paolo Fiorentino (stellvertretender Vorsitzender des Aufsichtsrates), AlessandroDecio, Olivier Nessime Khayat, Adolf Lehner, Alfredo Meocci, Marina Natale, Roberto Nicastro, Vittorio Ogliengo, Josef Reichl, KarlSamstag, Eveline Steinberger-Kern, Ernst Theimer, Robert Traunwieser, Wolfgang Trumler, Michaela Vrzal, Barbara Wiedernig.Interests held in the media owner pursuant to Section 25 of the Austrian Media Act:UniCredit S.p.A. holds 99.995% of the shares in the media owner (key details of the shareholder structure of UniCredit S.p.A. areavailable at https://www.unicreditgroup.eu/en/governance/shareholder-structure.html).“Betriebsratsfonds des Betriebsrats der Angestellten der UniCredit Bank Austria AG, Region Wien” (the Employees’ Council Fund ofthe Employees’ Council of employees of UniCredit Bank Austria AG in the Vienna area) and “Privatstiftung zur Verwaltung vonAnteilsrechten” (a private foundation under Austrian law; founder: Anteilsverwaltung-Zentralsparkasse; beneficiary: WWTF –Wiener Wissenschafts-, Forschungs- und Technologiefonds) have a combined interest of 0.005% in the media owner.