If you thought high interest rates and electricity prices were enough, the weak Norwegian krone exchange rate will also make your summer holiday significantly more expensive for anyone planning to travel to the USA, an EU country or the UK.
The Norwegian krone is at a crisis low and gives associations to the former Spanish currency pesetas, of which you had to have thousands to buy a coffee in Mallorca.
The euro is currently at NOK 11.7, but in the years 2000 and up to 2014 it hovered between 7 and 8.3 up to 2014, according to Norges Bank. That year it began to rise brutally against the krone.
A US dollar costs NOK 10.8 at the end of March and has not been so expensive in the last 25 years, according to the historical exchange rates at Norges Bank. The dollar has cost between 5.6 and 9 kroner until 2020. The British pound is also expensive, 13.8 kroner costs a British pound at the time of writing.
20 percent more expensive travel
The weak krona in combination with inflation, also in the countries we frequently travel to, makes the charter trips 20 per cent more expensive than last year, says country manager Marie-Anne Zachrisson in Ving to Nettavisen. Statistics Norway’s travel survey shows that travel costs rose by 24 per cent from 2022 to 2023, which is at the bottom of this year’s growth.
– Everything we pack is affected by the euro. The jet fuel is influenced by the dollar. This, in combination with a weak currency, means that travel prices have become higher in the years after the pandemic, she says.
Inflation has also affected prices at competitor TUI.
– Between 2022 and 2023, our prices generally increased in line with inflation by around 10 per cent. But it is important to include in the calculation that the prices for travel are dynamic and change all the time throughout the year. Here, demand in the market is a key factor as well as the prices of jet fuel, says communications manager Anne Mørk-Løwengreen at TUI to Nettavisen.
She further says that it is difficult to give an exact answer as the company sells trips to countries with different levels of inflation.
Norwegian says that prices are governed by supply and demand.
– The cost picture for a plane ticket is complex and consists, among other things, of fuel costs as well as taxes and fees. Increased fuel prices and airport taxes will naturally affect the prices of plane tickets, says senior communications advisor Eline Hyggen Skari to Nettavisen.
Economist: – I have given up
Chief economist Jan Ludvig Andreassen in Eika Gruppen is responsible for monitoring macroeconomics at home and abroad. He simply says that the krone exchange rate will be impossible to predict and that all previous explanations about why and how the krone is affected fall away.
– I have given up, says Andreassen to Nettavisen.
The krone exchange rate has not reacted to the recent drop in oil prices, high interest rates and surpluses in the state budget. Andreassen has previously argued for a fixed exchange rate policy where the krona is linked to the euro – and is doing so again.
– There is a lot of uncertainty around the krone and it creates noise for wage settlements, trade where people have no idea whether they will get a profit for the goods and foreign workers who travel in and out of Norway.
– One similar to what Denmark has, there are several strong arguments for now.
Still traveling
But expensive time or not, people go on holiday.
– We see that people are traveling to the traditional places on the Mediterranean: Spain, Greece, Cyprus and Croatia. Despite expensive time and high costs, people treat themselves to holidays. We see that the best hotels are sold first.
And Statistics Norway does not withhold that information. Norwegians’ travel activity increased both in and out of the country. But mostly domestically.
– It is interesting to note that the proportion of Norwegians who only vacation in their own country is increasing. Before the pandemic, around 10 per cent of those questioned in the travel survey stated that they only holidayed in Norway. In 2023, it had increased to 22 per cent, says senior advisor Guro Henriksen at Statistics Norway via the agency’s website.
– Travel to Liseberg
Macroeconomist Andreassen reminds us that the Norwegian krone stands against the Swedish krone.
– Go to Liseberg or something similar. Harrytur can be the big event for families this year.
And then he reminds that for companies in Norway that welcome tourists, the weak krone is a feast.
And if that’s not good enough, countries outside the eurozone are naturally cheaper.
– Turkish lira is more favorable. Even if there is to a large extent inflation there too, it will be reasonable, says Zachrisson in Ving.
She also advises travel-ready Norwegians to follow campaigns and newsletters.
– Please travel out of season, then it is cheaper than mid-July.
Tags: Travel Currency Travel prices rising sharply years holiday advice
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