Holiday costs jump as Brexit vote hits travellers' pockets

More than four in ten holidaymakers say they are planning a 'staycation' this year, as the falling pound bumps up the cost of going abroad.

New figures from insurance firm Columbus Direct show that around eight million of us will holiday in the UK this year as the Brexit vote makes foreign travel less affordable.

Since the vote, the value of sterling has plummeted. People travelling to the US will get £70 less when they buy £500-worth of US dollars than they did a year ago.

Meanwhile, those buying £500-worth of Euros will get £65 less; and people off to Switzerland for a ski holiday will get a whacking £88 less.

But it's those off to Australia that will see the biggest Brexit penalty, with £111 less for every £500 they exchange.

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"Anyone heading to Europe, the US and Australia especially will feel the pinch of less favourable exchange rates," says Columbus Direct's Rob Thomas.

"We have enjoyed a strong currency for many years, so the reduced strength of the pound is going to be noticeable for holidaymakers when it doesn't go as far as it used to."

How can you stop Brexit hurting your holiday plans?

There are a very few countries where sterling actually goes further than last year - although not by much. Anybody travelling to Japan, Mexico or Malaysia will get £20 to £30 more for their £500 than they did a year ago.

According to the survey, holidaymakers are trying to tighten their belts. More than one in ten say they set a budget in advance. Eight percent say they'll be taking fewer holidays this year, and seven percent plan to switch to self-catering accommodation to make up for the currency shortfall.

Price hikes of up to 50% in the wake of Brexit vote

So far, while the fall in sterling has affected travellers' spending money, the cost of the holidays themselves has remained much the same. Many travel firms have been able to hedge their currency risk for a short time.

However, this is only a temporary reprieve, and as Brexit negotiations continue, the pound is expected to remain extremely low - meaning that the price of package holidays will have to rise significantly to cover costs.

According to Travelzoo, the cost is likely to go up by at least 10%, with one in five operators saying they expect prices to rise by as much as 20%.