Holiday costs in eurozone countries are looking significantly cheaper this year. On Friday, the pound was worth €1.38 – which for British holidaymakers heading to, say, France, Spain, Italy and Greece is the most favourable rate for more than seven years. It’s around 14 per cent better than this time last year, and 20 per cent better than five years ago. Holidaymakers booking a village in the South of France can save more than £200 compared with last year . Put more graphically, if that villa in the South of France you’re looking at costs €2,000 (£1,450) a week to rent, it’s £231 cheaper than it was in 2014 and £353 cheaper than in 2010. Likewise, a meal for two in Venice with a €100 (£72) price tag costs roughly £12 less than this time last year, and £18 less than in 2010. Here are some issues that the better pound/euro exchange rate raises – but remember that if you use cards to get cash out of overseas ATMs, settle hotel and restaurant bills and make purchases, the actual exchange rate won’t be quite as good, due to the banks taking commission. Holidaymakers may get a better deal by booking direct, in euros, as most prices were fixed last year . Book direct? Most holiday companies will have fixed their prices with hoteliers and villa owners last year, when the pound was weaker against the euro. This means you may well get a better deal by booking direct, in euros. That said, I know of a number of operators and villa agencies that have recently lowered prices to take into account the better exchange rate, and tailor-made arrangements may be based on current exchange rates. So it’s worth doing DIY vs package price comparisons. Also bear in mind that you get better financial protection and back-up when you book a package. If you do book direct, to be sure of benefiting from the current good exchange rate, you need to pay in full now rather than putting down a deposit or paying on arrival/departure. The rate may be even better in a few months’ time, but of course it may have worsened. You could hedge your bets by obtaining some (but not all) of your spending money now . Buy euros now? The pound was worth about €1.40 a week ago, but by Friday it had fallen slightly. No one knows what it will do next, so if you buy euros now, you’re taking a gamble. But you could hedge your bets by obtaining some (but not all) of your spending money now. Consider doing so with a pre-paid euro currency card – the exchange rate used will be whatever it is on the day you upload the funds. The Ukash Travel Money MasterCard (ukash.com) has very competitive exchange rates and charges no fees for making purchases or cash withdrawals. A driving holiday on the Continent? The combination of more favourable exchange rates and lower oil prices means that filling up the car in eurozone countries is costing British motorists a lot less than a year ago. According to a Post Office Travel Money report, when converted into pounds, the price of a litre of unleaded petrol in France, Italy, Spain, Germany and Austria is down year-on-year by at least 20 per cent. In many European countries, fuel is also markedly cheaper than in the UK – about 10p less per litre of unleaded in France than in the UK. Prague is an attractive destination for Britons as the Czech koruna has plummeted against sterling . Beyond the eurozone . Exchange rates have also improved significantly for British travellers heading to some European countries outside the eurozone. Notoriously expensive Scandinavia is looking more affordable. Compared with this time two years ago, the Norwegian krone and Swedish krona are about 25 per cent weaker against the pound. You might also want to consider a break to Prague: the Czech koruna has plummeted over 20 per cent against sterling since spring 2013. But if you’re thinking of heading to the US this year, things are not looking so rosy. The strength of the US economy means that the pound is weaker against the dollar than at any time since June 2010. Worth a paltry $1.47 on Friday, the pound has dropped by more than ten per cent from 12 months ago – bumping up accommodation and day-to-day costs. Bear in mind that it’s not just in the States where the strong dollar is making things pricier for British visitors. The same is true in other holiday spots where currencies are pegged to the US dollar, such as Barbados, St Lucia and Antigua in the Caribbean, and Dubai.
The pound's value against the euro on Friday was strongest in seven years . The pound's worth of €1.38 is 14 per cent better than this time last year . It means a villa in the south of France worth €2,000 (£1,450) is £231 cheaper . Compare DIY vs package prices to ensure you're getting the best value . With the exchange rate and low oil prices, fill up the car for a road trip .