The world in turmoil isn’t good news, but it could be a boon to those booking a cruise – particularly if you are choosing one for next year or the year after.
But you need need to pick the right destination. The UK and Japan are looking good. America not so much.
The British Pound has taken a dive with one Australian dollar now equal to $0.57GBP after sitting as low $0.52GBP on January 30 this year. So if you act fast and pay for a future cruise in full, your fare might take a significantly smaller chunk out of your bank account than it normally would.
Cruise Traveller Product Manager Sam Patton says while the exchange rate is always fluctuating, if you do buy at just the right time, you could save yourself thousands.
“The sterling-Australian dollar exchange rate has fluctuated a lot lately and is hard to predict, but Australians can save by paying in full for a sterling fare cruise with a UK line on a day that the exchange rate is high.
Belle Goldie, owner of iTravel Penrith, drives this point home, stating that not only is the British Pound looking good against the AUD, but the USD is so strong it’s worth turning your attention to Europe and the UK anyway.
“The Sterling is definitely better against the AUD than the USD – USD is a shock, $0.54 is the current rate. I mean look at the Disney Cruises pricing!
“So yes, with the high exchange rate on sterling now is a good time to get in a Pay In Full for those trips.”
Michelle Levins, owner of My Cruise Concierge says as long as pricing is in GBP, you’re good to go and save yourself some extra cash.
“Australians can take advantage of cheaper land options and some cheaper cruise options where the pricing is in GBP and then converted to AUD pricing. Ask your travel agent if this applies to you!”
How does this work?
The crucial elements are buying your cruise through a cruise line that will sell you its cruise in British Pounds, and then paying the cost in full, before the exchange rate can fluctuate unfavourably. Some examples of lines you can purchase cruises in pounds from are P&O UK, Fred Olsen Cruise Lines and Majestic Cruise Line.
Using a longer cruise as an example, an ocean view room on Fred Olsen’s 79-night around the world cruise will set you back GBP13,099.
If you had paid for this cruise on January 30 this year when an Australian dollar would buy you $0.52 British Pounds, you’d find yourself $25,190.38 out of pocket (GBP13099/0.52).
However, if you were to pay for this cruise now with the rates at $0.57, you’d find yourself spending just $22,980.70 ($13099/$0.57). This marks a difference of $2,209.68 saved
However, there is one catch: most banks will generally charge you a fee of around 3% of your total purchase for purchasing in another currency. Adding a 3% fee to $22980.70 takes the total to $23670.12, which would still save a cruiser a total of $1520.26 in savings.
While these examples lean towards the Australian dollars relative strength to the British pound at the moment, this method can of course be used across any two currencies that have a currently favourable rate.
America is a very different story. The Aussie dollar has been down by as much as 13 per cent again the greenback from around US75¢ earlier this year to US65¢ on Wednesday – the lowest in a quarter of a century if you ignore the wild fluctuations of the pandemic and the global financial crisis.
NAB head of foreign exchange strategy Ray Attrill told The Financial Review he doesn’t expect a major recovery until mid next year. “The US has become very expensive, very quickly,” he said.
Mr Attrill said as far as Europe, the United Kingdom and Japan were concerned, the Australian dollar was doing well with the Aussie at its best in 8 years against the Yen. It’s also strong against the Euro.
Is it worth it for a cheaper cruise?
It depends. If you’re not looking to splash 20 grand on a cruise, can you still get worthwhile savings? Well, here are the numbers.
If we look P&O Cruises 19-night Mediterranean roundtrip from Southampton, leaving October 18, this starts from $2399GBP. In this instance, booking now compared to January 30 this year, when accounting for a 3% international transaction fee, will save you $278.43. Still a very significant sum to see shaved off your price.
Your savings will of course be more significant the more expensive the cruise and the larger sum you are able to pay up front.
Deals to take advantage of
Majestic Cruise Line, a small ship cruising line in Scotland is helping Aussie’s celebrate the AUD to GBP rate by offering customers to pay in full right now, with an offer of cancellation still available until 84 days before the cruise, minus a 20% deposit rate.
Fred Olsen Cruise Lines are not only offering free beverages on bookings across 42 European cruises in 2023 for bookings made by the end of October, but prices are also in pounds so you can save big on the exchange rate by paying in full.
P&O Cruises also has deals for each month, with savings already being earned as part of promotions you can get that price down even lower through paying in British Pounds before it gets stronger again.
