Planning a holiday post-Brexit? Then you’ll want to know which countries are going to give you the most bang for your buck. With that in mind, Phillip Garlick, Head of Commercial at travel money specialist H&T, shares his top four holiday destinations predicted to be cheaper after Brexit.
The holiday industry is experiencing some upheaval due to Brexit and, with concerns about potential travel disruptions, many Brits are being put off booking their typical European getaway. According to Seasonal Businesses in Travel, prices for European holidays are set to increase by 31% as a result of Brexit.
Not just that, but the political and economic uncertainty over the last two years has seen the value of the pound swing up and down, and holidaying in the EU is no longer as attractive as it once was. The pound is currently down on the euro and the dollar compared to 2016, but it is up against a lot of other currencies around the world. In this article, I’m going to share with you my top four holiday destinations where your money will go further post-Brexit.
Mexico is a fascinating holiday destination. With a rich culture, incredible scenery, and amazing food, it’s the ideal place for a beach getaway. Cancún is the go-to place for tropical seas and fantastic sunshine, with plenty to do whether you’re going as a family, with a group of friends, or on a romantic retreat. You’ll find all sorts of great water activities from snorkelling and scuba diving to windsurfing and jet skiing.
If cities, architecture, and culture are more your thing, try visiting the old colonial city of Puebla, known for its cuisine, history, and beautiful surroundings. In the centre of the city you will find Zocalo de Puebla, a public park and square housing one of the most important museums in Mexico, Museo Amparo, which is known for having one of the finest collections of Mexican art in Latin America.
Why it’s good for your wallet: There have been big ups and downs in the Pound–Peso exchange rate since the vote to leave the EU, but the overall trend has been quite steady. Mexico is still a very affordable country for British travellers though, as with many popular tourist countries, it’s away from the popular resorts where you’ll get the most out of your pounds.
Sat on the cusp of Europe, Turkey has long been a holiday favourite for Brits. Though numbers have declined in recent years, the Middle Eastern country is starting to see a resurgence, and for good reason. The country is home to one of the oldest civilizations in the world, and there is so much history, art, and culture to soak in, you’ll never run out of things to do. Istanbul is a classic choice for first timers: it’s the largest city in Europe and is also half in Asia. Explore the Grand Bazaar — one of the largest markets in the world — and discover thousands of stalls with everything from authentic spices and lamps to jewellery and rugs.
Many consider Istanbul to be the capital of Turkey, and it is perhaps the most cosmopolitan of all the country’s cities, but it is actually Ankara that takes that title. Despite this, Ankara is rarely found in travel guides. But, for those who love to be steeped in history, it is a fantastic choice. From the Mausoleum of Atatürk to the Kocatepe Mosque and the city’s Old Quarter to its ancient citadel, you’ll be blown away by how much there is to see.
Why it’s good for your wallet: Turkey is one of the most affordable destinations to visit all year round, but even more so when the Lira is at historic lows. This, combined with the rising popularity of the country and the increased presence of holiday companies, means the cost of a Turkish getaway is more affordable than ever.
Another popular location that isn’t too far from the UK, Morocco, lies just 20 miles from Spain across the Strait of Gibraltar. The gateway to North African, Tangier is an ancient city: a coastal gem and bustling trade city with deep historical influences from Arabic, Berber and European cultures. You’ll find everything you need for a varied holiday, from the winding labyrinths that are the city’s Old Town to its beautiful sandy beaches with perfect turquoise waters.
Further inland, not far from the foothills of the Atlas Mountains, you will find the vibrant cultural hub that is Marrakesh. The city is certainly unique, with an exotic charm that you will end up falling in love with. If you like lively cities, new experiences, and historical attractions, you won’t be disappointed. If you’re looking for a holiday reasonably close to home, with great weather and fantastic value for money, make Morocco your 2019 holiday destination.
Why it’s good for your wallet: Morocco is fast becoming one of the world’s premier tourist destinations with huge increases of US and Chinese visitors because of its relatively low cost of living. Due to its close proximity to Europe, you can get to Morocco relatively cheaply, although you’ll find big prices jumps in July and August.
India is a massive country — roughly half the size of Europe — with a huge diversity of cultures across the nation. For a long time, India has been a popular destination for Brits, not least because of how cheap everything is. You’ve no doubt had Indian food in the UK, but you probably don’t know just how much variety there is from region to region. If you’re a foodie, you won’t be disappointed.
The list of beautiful and idyllic locations is almost endless, from the sandy party beaches of Goa and the chilled-out waters of Karnataka to the exotic beauty of Kerala and the tropical wonderland of Andaman. But my personal recommendation is Chennai, a seaside city on the southeast coast of India, reaching out into the Indian Ocean. It’s well worth a visit and is amazingly affordable with a rich culture easily explored on foot.
Why it’s good for your wallet: India has long been lauded by holidaymakers the world over for how cheap it is. Of course, you can go overboard and live in 7-star hotels, and pay the price to match. But you’ll be able to rent your own private beach front home, eat out for every meal, and hire a taxi to ferry you around all day for less than almost any other destination on earth.
Book a holiday outside Europe this year and, whatever happens with Brexit, don’t worry about potential disruption. Choose one of my four locations and you’ll get the most out of your travel money.
CAPITAL MARKETS – LIQUIDITY MANAGEMENT DURING COVID-19
Tony Farnfield, Partner at management and technology consultancy, BearingPoint
When “Dr. Doom” predicted the 2008 financial crisis back in 2006, and spoke of a necessitated market correction and was calling for the repricing of riskier assets; predicting a continuation of a global financial slowdown, or even a global recession starting in 2020, this prediction was based on known factors affecting the global economy. The unforeseen outbreak of Covid-19 and the increased volatility this has brought to global financial markets was not taken into account.
Three months on from the initial outbreak, and we have already witnessed the biggest intraday drop in the Dow Jones Industrial Average. The outbreak, coupled with the oil price shock, triggered responses from the Federal Reserve, the Bank of England and Central Bank of Canada to cut benchmarks rates in an effort to even out the shock to the wider economies.
There is a high degree of uncertainty on how the coronavirus crisis will unfold. We could experience only a temporary disruption – lasting from a few weeks to a few months, or a prolonged stress in markets, assuming that it will be months until vaccine clinical trials begin and with rate cuts (already reaching bottom) having limited effects on the required stimulus.
Banks have undeniably improved their liquidity following regulatory guidance post financial crisis; however, treasury departments will need to prepare and caveat for a wide range of possible outcomes. Traditional stress testing, scenario development and re-calibration have not taken into account conditions such as the ones experienced with the Covid-19 outbreak or the speed with which things evolved.
At a generic level, there are three key steps Treasurer’s should look to take:
- Convert uncertainties into emerging and quantifiable risks
This is already being considered by some of the larger financial institutions under their crisis management responses. However, it’s important to highlight that even for those that have triggered the crisis management process, the forecasting, rebalancing and risk assessment should be continuous, taking into account new developments in the following manner:
Continuously monitor and develop scenarios of potential sources that could disrupt funding and liquidity usage. With the right analytical capability, cash-flow projections should adapt to changing scenarios, including scenarios coming from the different business lines. Scenario sources could include unexpected credit usage that could encourage either large prepayments or defaults, or changing corporate customer behaviour – deposit inflows from corporates and depositors affecting leverage-constrained institutions. Also, there should be some consideration given to the availability of funding sources or, for wholesale funding, acceleration or reduction of funding plans.
Take immediate actions in increasing liquidity and cash holdings in the short term to cover for the uncertainty.
Continuous risk assessment
Account for emerging risks previously not accounted for, such as the temporary closure of operations or reduced capacity of market utilities. Assess those scenarios and how these are captured and factored in stress tests. Intraday liquidity should be the primary focus to understand immediate cash requirements.
- Refine your liquidity risk measurement
Better identification, measurement and analysis of key liquidity drivers should become core for an institution’s ability to effectively manage and mitigate particularly unique risks not previously considered. To do this, Treasurers should consider the frequency of their monitoring, and increase levels to daily stress tests and daily Early Warning Indicator testing to include daily developments.
In-depth analysis of risks
Re-run your liquidity risk identification exercise to understand better your current exposures, especially examining certain instances of this outbreak crisis, e.g. oil-related exposures, airline, marine or supply chain related exposures etc.
Re-calibrate based on new understanding
Re-assess existing scenarios or add new scenarios in covering a range of events and timeframes (e.g. sustained spread of the virus over x months vs limited spread and containment). Revisit your Early Warning Indicators to monitor emerging risks. At a later point, revisit these to assess if market signals existed and if they were picked up by your indicators.
- Review your mitigation plan
Identification, assessment and measurement is only part of the overall response. Stresses or risks that can be crystallised need to be accompanied by mitigative actions, agile and feasible enough under the current market conditions. Contingency funding actions might need to be revisited to determine if additional actions need to be considered.
Revisit and verify the availability of near real time reports, such as positions of securities holdings reports. Such information should be readily available and synthesised in the event that you will need to communicate clear and concise plans to investors, regulators or other market participants in relation to liquidity management strategies to foster confidence in the market.
In summary, reviewing and preserving an institution’s liquidity under extreme and volatile circumstances is the core responsibility of any treasurer. However, we know that any scenario or contingency planning is unlikely to be fully predictive of unprecedented scenarios such as this. Re-visiting already set practices and testing their efficacy and completeness should be the first step before considering inserting new scenarios and new actions into the mix. Nothing tried and tested can always remain true.
STOP THE CONFUSION: HOW TO KNOW IF YOUR BUSINESS MAY BE INSURED AGAINST COVID-19
By Alex Balcombe, Partner at Harris Balcombe
The last few weeks has seen businesses in hospitality, tourism, retail, leisure and more forced to close their doors following the Government’s orders that they should close to prevent the spread of coronavirus.
While this is expected to flatten the curve and reduce the number of coronavirus cases, it will of course have an impact on businesses and employees alike. For small businesses especially, there are many concerns about how they can claim on their insurance to weigh the fall of this impact.
In response to calls to help struggling businesses, the Government has informed the public that companies who are facing turmoil will be able to claim on their business interruption insurance during this difficult time. For most, this is wrong.
The insurance industry has also been extremely vocal that there is no cover for any coronavirus-hit businesses during this tough financial period. This isn’t strictly true either.
How can businesses see through the mixed messaging and best secure their future and their livelihoods and reduce money worries? It’s an extremely stressful time for many companies, and confusion over whether or not they can be covered can only cause more unnecessary stress.
Since it’s a new disease, most businesses will not be covered for business interruption due to COVID-19. In fact, the vast majority of policies do not cover anything related to COVID-19.
That said – don’t rule out the idea that you may be covered. There is a chance that you will be covered against COVID-19, but not know it. This is a very small chance, but your current cover may already protect your business against the consequences of coronavirus, and the nationwide response to it – though those with this cover are unlikely to realise it.
How Could I Be Covered?
Not everyone has business interruption insurance, as it’s not a legal requirement. It is entirely up to the policy holder to weigh up the benefits of having it, and their ability to trade should a disaster happen.
To be considered for cover for COVID-19, there are two types of policy extensions to your business interruption cover that can potentially cover you for this situation:
Infectious Disease Extension
Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy will not provide cover. As it is a new disease, these policies will not have included COVID-19.
Other infectious disease extension policies will define the disease with reference to the actions of the government. Since the UK Government has named COVID-19 as a notifiable disease throughout the UK, it is possible that your business may fall into this definition, thus meaning you may be able to make a claim.
However, again, it’s not always that simple. Many policies require the disease to have been on your premises, while others specify a radius from your premises in order to qualify.
Denial of Access Extension (non-damage)
Denial of Access Extension (non-damage) policies may cover you if you’re prevented from accessing your property. This could be due to an event, or by the actions of a competent authority, which could cause your business interruption cover to engage.
If covered by this clause, there are often very subtle differences in wording in your policy. This could depend on the insurer or policy. You may well be covered, but it will depend on your particular circumstances, and the specific policy wording.
It’s clear that the Government needs to do more in ensuring there is clear messaging for businesses, and to help the insurance market look after policy holders. This is an unprecedented situation, and with many people looking to claim on their insurance, we’re already seeing major delays which could have a domino impact.
People throughout the world are understandably facing all kinds of worries because of the current pandemic. Our ways of living have changed, and many business owners will not have experienced a situation like this in their life times. If you own a business and are unsure about whether you can claim for business interruption, or are confused about ambiguous wording, get in touch with a loss assessor.
These claims are not simple, but loss assessors will be experts in business interruption insurance, and will specialise in large and complex claims. They will be able to help and guide you along the way, check your wording and work on your behalf to make sure you get everything you are entitled to.
CAPITAL MARKETS – LIQUIDITY MANAGEMENT DURING COVID-19
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