ANALYSES. HolidayEuro Summer Purchasing Power of the Euro Abroad. July 2015 BANK AUSTRIA ECONOMICS & MARKET ANALYSIS AUSTRIA

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1 Purchasing Power of the Euro Abroad July 2015 ANALYSES HolidayEuro Summer 2015 BANK AUSTRIA ECONOMICS & MARKET ANALYSIS AUSTRIA

2 Overview Holiday uro worth more in Europe in 2015, but much less overseas Holiday uro worth more in Europe due to higher Austrian inflation Yet overseas it is worth roughly 15 percent less thanks to weaker 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 holiday destination by far Author: Stefan Bruckbauer Imprint Published by UniCredit Bank Austria AG Economics & Market Analysis Austria Schottengasse Wien Telefon +43 (0) Fax +43 (0) July 2015 Bank Austria Economics & Market Analysis Austria page 2

3 In detail There is no clear-cut trend for the value of the Holiday uro for Austrians in In summer 2015 the Holiday uro is worth the same as last year on average. But if we look at the Holiday uro on long-haul trips, it transpires that it is worth around 17 percent less in these cases. In this context there are two different trends this year with the most popular holiday destinations. On the one hand, the Holiday uro has gained in value on average in the eurozone countries compared to Austria a consequence of the higher inflation in Austria. On the other hand, in countries that don t have the euro, the HolidayEuro has lost considerable value for Austrians as the euro has markedly depreciated. The HolidayEuro benefited in many euro countries from the lower inflation than in Austria, while in the non-euro countries it suffered from the depreciation of the euro. Among the main holiday destinations for Austrians, holidaymakers from Austria currently get more for their Holiday uro in Hungary and Turkey. They also stand to get noticeably more in Croatia, Slovenia, Greece and Portugal than in Austria. Those spending their holiday in the USA this year can expect prices to be similar to Austria, while one year ago prices were roughly onefifth cheaper. In many countries of Eastern and South-eastern Europe the Holiday uro is also worth much more than in Austria, first and foremost in Bulgaria, Romania and Poland, and this advantage has even increased slightly compared to last summer. In Greece the Holiday uro this year is worth around 20 percent more than in Austria, having gained another 3 percent compared to the previous year. This is the result of falling prices in this country. Since the start of the crisis in 2008 the value of the Holiday uro for an Austrian holidaymaker in Greece has thus risen by around five percent. Overseas the somewhat higher inflation in Austria barely plays a role when comparing the value of the Holiday uro, here the exchange rate trend is more important. The depreciation of the euro since the summer of 2014 has significantly reduced the value of the Holiday uro overseas for Austrian tourists; this year you get around 17 percent less than in the previous year. In Asia in 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 these currencies also lost value. The difference in countries like Brazil or the Dominican Republic compared to the previous year is small on average, but it amounts to 20 percent in Mexico. If On holiday, EUR 100 are worth Hungary Turkey Croatia Slovenia Greece Portugal Spain Germany France USA Italy Austria Canada United Kingdom Switzerland Total Source: Bank Austria Economics & Market Analysis Austria (own estimates), OECD, Eurostat, Statistik Austria, July 2015 Bank Austria Economics & Market Analysis Austria page 3 July 2015

4 someone spends their holiday in the United Kingdom they will find this year that their Holiday uro is again worth a little less than at home, whereas last year it was worth 9 percent more. Holidaying in London will show that the Holiday uro is worth noticeably less than in Austria for the first time this year, and roughly 12 percent less than one year ago. The same applies for a holiday in Canada. Taking a holiday in Switzerland is still expensive, where 100 Holiday uros are now worth just 59 euros the sharp appreciation in the currency cannot compensate for the deflation in Switzerland. As an alternative to Switzerland, but also to Austria, the Holiday uro would be worth slightly more if holidaying in Germany or Spain, but this is perhaps less noticeable and too small to compensate for the longer journey. The Holiday uro is definitely worth less than in Austria if going to Ireland and Sweden. In conclusion we point out that these are average figures, and individual areas (such as London as a central region) can differ. The price levels relate to averages of goods and services in the individual countries; individual products (particularly for tourists) can deviate from these significantly. This is why no values were given for long-haul destinations, only the changes in the figures. Furthermore, the fact that the price levels are so much more affordable in some holiday destinations than in Austria is primarily due to the high income level in Austria. If the price level were lower in Austria, the income level would also be lower and holidays would be difficult to afford. On holiday, EUR 100 are worth Comparison of Purchasing Power *) Destination Popularity 1) Jul-15 Jul-15 - more exp. EUR 100 are worth EUR... in this country + cheaper 2) ompared to previous yea in % Austria Italy 22% % Croatia 15% % Germany 9% % Spain 7% % Turkey 4% % Greece 4% % France 4% % United Kingdom 3% % Hungary 3% % Switzerland 2% % Slovenia 1% % USA 1% % Portugal 1% % Canada 0% % Total 3) 73% % *) EU-25 countries excluding housing costs 1) Percentage of holidays abroad longer than 4 days taken by Austrians 2) Compared to Austria 3) Only the most important countries Source: Bank Austria Economics & Market Analysis Austria, OECD, Eurostat, Statistik Austria Bank Austria Economics & Market Analysis Austria page 4 July 2015

5 Changes in the "Holiday uro" (since July 2014 in %) 15% Holiday uro is worth less*) 10% 5% 0% -5% -10% -15% -20% -25% Hungary Greece Slovenia Spain France Italy Portugal Germany Croatia Austria Holiday uro is worth more*) *) Compared to value in Austria Turkey South/Central America Canada United Kingdom Switzerland Overseas average Asia Africa USA Changes in the "Holiday uro" (less frequently visited countries, since June 2012 in %) 12% Holiday uro is worth more*) 10% 8% 6% 4% 2% 0% -2% *) Compared to value in Austria -4% -6% Poland Cyprus Romania Sweden Slovakia Ireland Netherlands Bulgaria Czech Republic 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% Changes in overseas "Holiday uro" (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% Source: Bank Austria Economics & Market Analysis Austria Change of Holiday uro in overseas countries (since July 2014 in %) 25% 15% 5% Brazil New Zealand Australia Holiday uro is worth less*) -5% -15% -25% -35% -45% Holiday uro is worth Dom. Republic *) compared to value in Austria Japan Tunisia South Africa Thailand Overseas average Mexico China Hong Kong Egypt Source: Bank Austria Economics & Market Analysis Austria Bank Austria Economics & Market Analysis Austria page 5 July 2015

6 On holiday, EUR 100 are worth Comparison of Purchasing Power *) Destination Popularity Jul-15 Jul-14 - more exp. EUR 100 are worth EUR... in + cheaper this country compared to previous year in % Austria Italy 22.1% % Croatia 14.5% % Greece 4.2% % Germany 9.4% % Spain 7.4% % Turkey 4.4% % France 3.6% % Hungary 2.5% % Slovenia 1.4% % United Kingdom 3.0% % USA 1.4% % Switzerland 2.0% % Portugal 1.0% % Canada 0.1% % Czech Rep. 0.6% % Ireland 0.8% % Sweden 0.3% % Cyprus 0.4% % Romania 0.6% % Slovakia 0.6% % Poland 0.8% % Netherlands 0.8% % Bulgaria % Asia 2.3% % Thailand % Japan % Hong Kong % China 0.2% % Africa 3.8% % Egypt 2.2% % Tunisia 1.3% % South Africa 0.3% % South/Central America 0.8% % Mexico % Dominican Republic % Brazil 0.1% 162-5% Australia 0.1% 82-0% New Zealand 0.1% 92-5% Overseas average 7.0% % Total 1) % *) For EU countries without housing costs 1) only the most important countries Source: Bank Austria & Market Analysis Austria, OECD, Eurostat, Statistik Austria Bank Austria Economics & Market Analysis Austria page 6 July 2015

7 Disclaimer ans Imprint We invite you to visit the economic analyses on Bank Austria s website: under "Markets & Research" in the section "Economic Research Austria" or directly at If you would like to receive information on our most recent publications by , please subscribe to the newsletter Bank Austria EconomicNews on the website under following link: If you have further questions, please send us an to econresearch.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 the services of the authors. The information contained in this publication is not to be interpreted as an offer or invitation for the sale or purchase of securities of any kind. We reserve the right to modify the views expressed in this publication at any time without prior notification. This information should not be interpreted as a recommendation to buy or sell financial instruments, or as a solicitation of an offer to buy or sell financial instruments. This publication serves information purposes only and does not replace specific 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 and other 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 AG 1010 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), Helmut Bernkopf, 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), Alessandro Decio, Olivier Nessime Khayat, Adolf Lehner, Alfredo Meocci, Marina Natale, Roberto Nicastro, Vittorio Ogliengo, Josef Reichl, Karl Samstag, 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 % of the shares in the media owner (key details of the shareholder structure of UniCredit S.p.A. are available at Betriebsratsfonds des Betriebsrats der Angestellten der UniCredit Bank Austria AG, Region Wien (the Employees Council Fund of the Employees Council of employees of UniCredit Bank Austria AG in the Vienna area) and Privatstiftung zur Verwaltung von Anteilsrechten (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. Bank Austria Economics & Market Analysis Austria

ANALYSES. HolidayEuro Summer Purchasing Power of the Euro Abroad BANK AUSTRIA ECONOMICS & MARKET ANALYSIS AUSTRIA

ANALYSES. HolidayEuro Summer Purchasing Power of the Euro Abroad BANK AUSTRIA ECONOMICS & MARKET ANALYSIS AUSTRIA HolidayEuro Summer 2016 ANALYSES BANK AUSTRIA ECONOMICS & MARKET ANALYSIS AUSTRIA Purchasing Power of the Euro Abroad June 2016 Overview Holiday uro worth more in 2016, while Brexit makes the United Kingdom