Silver lining! Plunging hotel prices make city breaks cheaper across Europe

UK holidaymakers who are considering a break this autumn in cities whose countries are on the government’s quarantine exemption list can look forward to seeing their pounds stretch further in many of Europe’s most popular cities – thanks largely to sharp falls in average hotel prices since the Covid-19 pandemic took hold in March. In a best value barometer dominated by Eastern Europe and led by Vilnius and Warsaw, Post Office Travel Money’s annual City Costs Barometer found that prices are as much as 26% lower than a year ago and have also dropped by up to 26% on pre-lockdown levels in early March.

Prices for 50 cities were researched in March, when the report was intended for publication but delayed by Covid-19. All 50 were price-checked in August but the Post Office decided to focus on 24 cities which are not subject to UK quarantine or other countries’ restrictions.

The City Costs Barometer reveals that prices are lower than a year ago in two thirds of cities, with the biggest falls of almost 26% in Reykjavik and Oslo. Barometer costs also fell significantly in Belfast (-23.7%) and Dublin (-19.3%).

The Post Office found that even more cities – 22 (92%) of the 24 surveyed – saw falls in their barometer cost when prices researched in August for meals, drinks, city transport, sightseeing and accommodation were compared with those collected before lockdown in March. Italian cities – Rome (-20%), Milan (-18%) and Verona (-18%) – saw some of the biggest drops but the biggest fall of 25.5 per cent was in Dublin. A key factor in the price falls has been greater hotel availability, which has led to more competition and lower room rates. Only two cities (Athens and Katowice) registered rises in the average cost of two nights’ three-star accommodation compared with March.

By comparison, prices plunged over 20% in 12 cities led by Dublin, Belfast and Rome. Eastern Europe dominates the City Costs Barometer top 10, taking seven places. With just a pound separating them, Vilnius and Warsaw are cheapest of the 24 cities.

With Portugal newly added to the list of countries exempt from quarantine, Lisbon has re-entered the top 10 in fourth position (up from last year’s 14) with a year-on-year price fall of 8.4%. Portugal’s second city, Porto, is just behind in fifth place, although prices have risen almost 13% since last year.

Closer to home, Belfast completes the top 10 in 10th place boosted by a sharp fall in hotel costs, thanks to greater availability. Its barometer total has dropped almost 24% since last summer and is 25%  lower than in March. Italian cities look better value this year with prices well down on March levels. Three of them saw double-digit percentage prices falls: In 11th place, Rome is cheapest while Milan is 12th and Verona is in 16th place.

Nick Boden, head of Post Office Travel Money, which accounts for one-in-four UK currency transactions said: “This year’s report reveals that there is plenty of choice across Europe in cities that offer great value. Prices compare very well with those a year ago, partly because sterling is stronger than in late summer 2019 but more notably because of the falls in hotel prices caused by greater availability after the Covid-19 lockdown. We have chosen to feature only those cities currently excluded from quarantine restrictions but we urge people planning trips to watch FCO advice carefully before booking their holiday.”

Most expensive in the 2020 City Costs Barometer is Copenhagen.