How the strong Swiss franc is making holidays abroad cheaper
After the gloomy news about various disruptions marring vacation travel this year, there is one bright spot: Switzerland’s currency.
Recent news reports have focused on the negative aspects of foreign travel this year, with inflation and rising fuel costs causing the price of air tickets to soar.
Add to that other inconveniences such as flight delays and possible strikes - and holidays all of a sudden don’t seem so restful.
However, some positive developments are emerging as well: the franc has strengthened 10 percent against the euro, which means vacationing in most European countries this year will be cheaper for people who earn their salaries in Switzerland.
This applies to the most popular holiday destinations such as Italy, France, Portugal and Spain, among others. In those countries, you will spend less on accommodations, food, entertainment, and other expenditures than people living in the eurozone.
Right now, 1 franc will buy you 1.009 euros, so if you exchange 1,000 francs, you will get 1,009 euros. On the whole, this amount will buy you more in eurozone countries than in Switzerland.
Experts say you can save even more if you drive to your destination abroad rather than fly.
“Travel by car is very attractive today, A litre of petrol costs 2 euros in France, or just under 2 francs, compared to 2.3 francs here”, according to John Plassard, investment specialist at the Mirabaud bank.
But that’s not all: as the franc has also strengthened against other major currencies like the US dollar and British pound, you will get more bang out of your money in some countries outside Europe as well.
You can see the current conversion rate between the franc and other currencies here.
Why is the Swiss franc so strong even amid international turmoil?
Paradoxically, geo-political upheavals, such as Russia’s invasion of Ukraine, are the major reason for this phenomenon: foreign investors view Switzerland as a safe haven in a turbulent world.
Its stable economy is also a plus, while the low national debt and the current account surplus are also contributory factors in the strength of the franc.
Can the strong franc offset inflation and travel woes?
The franc’s strength can only be “felt” abroad, not while spending money in Switzerland, so the degree to which it can offset overall cost of living increases is minimal.
With inflation on the rise — having reached 3.4 percent in June, up from 2.6 percent in April — the cost of living is continuing to rise in Switzerland.
This increase concerns a variety of products, ranging from energy to food, and there is no relief in sight for the foreseeable future; in fact, Swiss authorities say that prices will continue to climb.
On the travel front, aside from the above-mentioned strength of Swiss currency once you actually get to a foreign country, expect cancellations of flights, chaos at airports, and delays in air as well as on the road.