MARKET OVERVIEW

Exchange Rates
With the decline of the GBP against the rise in value of the AUD, Australia is now a more
expensive holiday destination proposition for the British. The strength of the dollar is seen to have
had a negative effect on product pricing in key tour operator programmes for 2010/11 particularly
when reviewed against other major destinations which have become more price-competitive.
Current rate of exchange (Google spot rate as at 11 th October 2010) 1 GBP – 0.6171 AUD.
On average by May 2010, the British Pound was buying 32% fewer Australian dollars than in
December 2008.
Sterling has also continued to remain weak against the euro, resulting in an annual average
exchange rate of GBP 1: €1. This however has driven customers away from the more traditional
and mass market holiday in the euro zone, and has added to the growth in visitors to non euro
zone short haul countries such as Egypt which has seen significant growth.
Having appreciated strongly against the US dollar in 2007 providing great value for the UK visitor
to the US with a rate of exchange of around one pound to two US dollars, sterling has now
weakened against the US currency making the US slightly less favourable from an exchange rate
basis.
ECONOMIC & FINANCIAL OVERVIEW
IRELAND
Ireland is a parliamentary republic with the key political parties being Fianna Fail, Fine Gael,
Labour, Progressive Democrats, Green Party, and Sinn Fein. Ireland, after being one of the
strongest economic performers in Europe in recent years, has seen a massive downturn, almost
without precedent.
The Irish banking system remains in a precarious state despite liability guarantees and
recapitalisation by the government. The full nationalisation of all of the banks is possible over the
outlook period.
The unemployment rate averages around 13.25% and is expected to fall marginally to 13 per cent
in 2011. The General Government Deficit is expected to be 11.5 per cent of GDP in 2010.
Including the cost of the bailout monies for Anglo Irish Bank and Irish Nationwide, this figure
would be 19.75 per cent. In 2011, the deficit will fall to 10.5 per cent of GDP. This is based on the
assumption that a full €3bn package of austerity measures is implemented in the 2011 budget. By
the end of 2011 the gross government debt will be equivalent to 94 per cent of GDP, compared
to 44 per cent in 2008. Interest payments (excluding toxic property loans agency NAMA), which
will also increase due to the cost of the bank bailout, will be close to €6bn, or 3.5 per cent of
GDP in 2011.
4 UK & Ireland 2010