For households with home loans, vehicle finance, or other variable-rate debt, the increase means monthly repayments are likely to edge higher, leaving a little less room for non-essential spending.

So, does this mean the holiday of your dreams needs to go back onto the “maybe one day” list?

Not necessarily. Analysts and trade union officials still expect headline inflation to average 4.4% this year, according to the latest survey commissioned by the South African Reserve Bank. Forecasts for 2027 and 2028 have also improved slightly, falling to 4% and 3.8%, respectively.

Stable inflation expectations don’t mean prices are falling, and the interest-rate increase may place additional pressure on household budgets. However, greater predictability can still make it easier to set a realistic savings target and understand how long it might take to reach it.

“An interest-rate increase is never welcome news for indebted households, and travellers should reassess what they can comfortably put aside once their essential expenses and repayments have been covered,” says Antoinette Turner, General Manager of Flight Centre South Africa. “But that doesn’t necessarily mean abandoning the idea of a holiday. It may mean adjusting the destination, extending the savings period, or starting with a smaller amount. The important thing is to plan around the budget you actually have.”

A separate consumer confidence survey found that South African sentiment improved during the third quarter. While households are still expected to prioritise essentials and approach festive-season spending thoughtfully, the shift suggests that Saffas are beginning to feel a little more hopeful about their finances.

So, what does a holiday actually cost?

Based on current pricing, a couple could enjoy a short local break for less than R4,000*, while longer regional and international escapes become possible with a bigger budget and a longer savings runway. After all, a trip that feels impossible as one large expense can look very different when it’s broken into manageable monthly amounts.

“Affordability is personal, which is why holiday planning shouldn’t begin with a destination pulled from someone else’s bucket list,” says Turner. “Start with an amount you can save comfortably and consistently after covering your essential expenses, updated debt repayments, and emergency provision. If that amount is R500 a month, don’t dismiss it as ‘too little’. Over a year, it becomes R6,000 – enough to cover certain short local breaks for two at today’s prices. Start with the number that works for your household, give it time to grow, and then choose the holiday that fits.”

A current holiday price ladder for two

The examples below are based on selected Flight Centre package prices available at the time of writing.

It’s important to remember that the lowest headline price isn’t automatically the most affordable holiday. Turner cautions:

“Travellers need to compare what their money actually covers. A package that includes flights, transfers, and meals may offer greater cost certainty than a cheaper option that leaves most expenses to be settled in foreign currency. The rand can be volatile, so knowing that a large portion of the trip has already been paid upfront can make the final cost easier to predict and protect your budget from unwelcome surprises.”

There’s also one more important catch: current travel offers have specific booking deadlines and travel periods. A package available today may expire long before someone following a 12-month savings plan is ready to travel.

The figures above should therefore be treated as an indication of what different holiday categories cost now, not a guarantee that the identical package will be available at the same price in future.

The best holiday is one you can afford to enjoy

“There’s no single amount that makes someone ‘able to afford travel’,” Turner concludes. “For one household, success might be a R4,000 road trip. For another, it might mean saving for 18 months towards an international holiday. The win is being honest about the numbers, allowing enough time, and choosing an experience that leaves you with good memories – not months of financial stress.”

Stabilising inflation may not put cheaper holidays on the departures board immediately. But if it brings a little more predictability to household budgets, it could help many South Africans replace “maybe one day” with a date, a monthly target, and a holiday that truly fits.

*Based on Flight Centre holiday packages as of 21 October 2026

FLIGHT CENTRE TRAVEL GROUP SOUTH AFRICA

Flight Centre Travel Group (FCTG) SA is part of Flight Centre Travel Group, an Australia-based international travel company listed on the Australian Stock Exchange, with a market cap of AU$2,31 billion and a current share price of AU$11.42 as of 22 October, 2026. FCTG with three leading brands: Flight Centre, Corporate Traveller and FCM, of which Corporate Traveller and FCM are proud level 1 BBBEE Contributors. FCTG SA is wholly owned and has been recognised as one of Deloitte’s Best Companies to Work for in South Africa for over a decade.

The rand is at its most stable in years. Inflation is falling; load-shedding is gone. And somehow, South Africans are still waiting to book that trip.

They’re waiting for the rand to improve. Watching a fare, watching the currency, and watching both move in the wrong direction while the decision gets deferred for another month.

The rand is currently trading at around R16.43* to the US dollar, around R21.93* against the pound, and approximately R18.52* against the euro – a level that Investec chief economist Annabel Bishop describes as “relatively stable in light of the return to war in the Middle East,” supported by improving domestic fundamentals and foreign investor sentiment, as well as South Africa’s recent sovereign credit rating upgrade by S&P Global. Furthermore, the Government of National Unity has noticeably bolstered investor confidence, and National Treasury projects GDP growth of 1.6% in 2026, rising to 2% by 2028.

By South African standards, this is a reasonable place to be. The question is what to do with it.

“The travellers who get the best value understand that the rand rate is only one part of the equation,” says Antoinette Turner, General Manager at Flight Centre South Africa. “Flight prices and availability move independently of the currency, and in the current aviation environment, with capacity constrained and demand recovering strongly, the fare you’re watching today is not guaranteed to be there in 3 – 6 months’ time, regardless of what the rand is doing.”

What waiting actually costs you

Multiple analyst forecasts, including by The Economy Forecast Agency, suggest the rand could strengthen modestly over the next 12 months, potentially trading closer to R15.50 to R16.00 against the dollar by mid-2027. On a R20,000 trip, a R1.00 improvement in the rand-dollar rate saves you roughly R1,200, which sounds meaningful.

However, global airline operating expenses are growing at 13% year-on-year, driven largely by a 70% surge in jet fuel costs. Airlines are responding by narrowing the gap between their lowest and highest fares. The deep-discount inventory that once made last-minute or flexible booking viable is contracting and the fare floor is rising.

The question was never “is the rand strong enough?”. It’s “is the value available to me today better than the value I’m likely to find if I wait?” Right now, for many destinations, the honest answer is yes.

Where the rand goes further right now

For travellers whose priority is maximising what their money buys on the ground, the current environment offers some truly exciting options, particularly within Africa, where the rand’s relative strength against neighbouring currencies creates notable purchasing power.

Namibia is the most practical starting point. The Namibian dollar is pegged to the rand at 1:1, meaning your money goes exactly as far as it does at home, but your accommodation, activities, and food often cost considerably less than equivalent South African options, particularly for self-drive itineraries through the Namib Desert and Etosha.

Mozambique offers strong beach value without premium pricing. The metical has weakened against the rand over time, and for travellers driving to Ponta do Ouro or flying to Vilanculos, the on-the-ground costs remain among the most affordable of any Indian Ocean beach destination accessible to South Africans.

Thailand and Vietnam remain the benchmark for long-haul value, according to Turner. Both the Thai baht and Vietnamese dong offer favourable rates against the rand, and day-to-day costs, like accommodation, food, transport, and activities, are low enough that the return airfare is often the most significant expense of the entire trip.

Egypt and Turkey stand out for city-break value, with affordable accommodation, dining, and transport relative to European alternatives, and direct or straightforward routing from South Africa.

“The rand is stronger than the Indonesian rupiah, the Tanzanian shilling, and the Thai baht right now,” notes Turner. “For South Africans who are flexible on destination, that translates into tangible value on the ground, not just a favourable-looking exchange rate, but a trip that costs less to live once you arrive.”

The smarter question to ask

Flight Centre’s 2025 global PR survey found that 96% of South African travel intenders are actively adapting their plans to make travel more affordable. That instinct is right, but adaptation doesn’t mean waiting; it simply means choosing smarter.

Book when the value is real and available, and rely on a travel advisor who can tell you not just what a fare costs today, but what the total trip will cost once baggage fees, seat selection, and flexibility premiums are factored in. Understand that a stronger rand in six months’ time is a forecast, while the fare in front of you right now is a fact.

“The rand is behaving,” concludes Turner. “That’s not a guarantee of anything – currency markets never are. But it is an opportunity, and opportunities in travel, like fares, have a habit of disappearing while you’re still deciding whether to take advantage of them.”

*Exchange rates correct as of 16 October 2026.