Vacations to be a tough lesson in economics this year

According to Pawel Majtkowski, an analyst at eToro Markets in Poland, all forms of holiday travel will be particularly expensive this year, and in many cases the most expensive ever. 

"Recreation in the country is becoming more expensive due to the initiation, which at the end of May amounted to as much as 13.9 percent y/y. This is how much more expensive on average today is a basket of products and services surveyed by the GUS. However, some prices increased much more. For example, fuel has increased in price by almost 50 percent since the beginning of February (from about PLN 5.30 to PLN 7.90), which significantly increases the cost of travel. Food is also becoming more expensive, and at the end of May, it was 13.5 percent more expensive than the year before. Travelers will be hit hard by the growing prices in the tourism industry. Prices in hotels and restaurants went up by 15.7 percent y/y," an eToro representative said.

But inflation is high in most countries where we go on vacation, so there is no chance to escape it by going abroad. Among the major countries to which Poles go on vacation, only Turkey (as much as 61.1 percent. y/y) and Egypt (13.1 percent. y/y) have higher inflation. In other countries, inflation is lower than in Poland, but everywhere it exceeds 7 percent. Prices of foreign holidays will be 20-30 percent higher compared to the pre-pandemic period only because of rising inflation. According to Majtkowski, the second element that makes this year's vacation expensive is the weak zloty. 

(WBJ)