Southern Bolivia

A few years back I wrote an article for Transitions Abroad that I updated this month: Budget Travel in South America.

It’s not meant to be a comprehensive country-by-country rundown, but rather a strategy guide to where your money will stretch and what you can expect to pay in general terms. Then at the end there are some resources to turn to for more specifics.

Traveling on a budget in this region has gotten a lot more complicated since I did the first version of that article five years ago. Argentina has become a fiscal basket case again and on top of that they added a reciprocal visa fee that’s payback for what we charge them to enter our own countries. A family of four would now pay around $560 before exiting the airport. This same fee is in place in Chile, Bolivia, and Brazil, which is probably part of the reason those countries get far fewer visitors than Peru, Ecuador, and now Colombia.

Cartagena, Colombia

If you watch financial news regularly, you’ll know that the resource-based economies around the world have been on a roll. Those that have lots of things to extract from the ground have seen their economies boom. In the developed world that means places like Canada and Australia. In South America it means Peru, Chile, and Brazil. Those latter two have gotten far more expensive when their currencies appreciate and Brazilians are now the free-spending travelers of the Americas, buying up a storm wherever they go. (And saving Argentina’s tourism industry in the process.) Colombia has been on a roll—too much of one actually. The government is frantically buying dollars to slow down the appreciation of its currency.

So where would I say you should go if you wanted to backpack through South America for a few months or more? I’d say you should fly to Central America first, because you can do it more cheaply with money or miles, then make your way through Panama and either fly or take a boat to Colombia. Spend a few weeks in semi-expensive Colombia, then go overland to Ecuador and watch your money instantly buy twice as much. (Except liquor and wine, which just doubled in price there this year.)

Chivay, Peru

You’d then continue down to Peru, hitting the highlights in a leisurely fashion from north to south, then enter Bolivia via Lake Titicaca. You’d make your way overland down to the Salar de Uyuni, spend some time around there, then bus it over to Salta in Argentina. Go overland to Iguazu Falls and then Buenos Aires, taking a detour to Uruguay somewhere along the way by land or ferry. Then take a series of very long bus rides down to Bariloche. Explore Patagonia there and in Chile, then fly up to Santiago. From there if you still have money left, you could spend some time in wine country and Valparaiso in Chile or fly to Brazil for some coastal time. Or head home, or back to Central America, or Mexico.

They key in all of this is to take your time! Distances between many of these locations are vast. Chile end-to-end is the distance of the west coast of the U.S. to the east coast, to give you an idea. These bus trips are so long you get a sleeping berth. You can cut off a lot of time flying, but domestic flights are no bargain except for a few routes like La Paz to Sucre. Trying to be a box-checking, bucket-listing, country-counting flashpacker is going to cost you far more money and part of your sanity.

For a country-by-country breakdown of these destinations and others around the globe, pick up a copy of the new 4th edition of The World’s Cheapest Destinations.

The February issue of Perceptive Travel is now out, fresh off our racking up a record six best travel writing awards from the North American Travel Journalists Association. We could just kick back and bask in the glow of our medals, but no, we’re going to keep cranking out interesting, unique, offbeat travel stories for your reading pleasure.

This month Bruce Northam takes us traveling around the Yukon Territory, a place the size of California that has 35,000 people. Want to reinvent yourself or start over? Leave your iPhone in busyland and head north to stake a claim.

Camille Cusumano last brought us the story of a hiker gone missing in Patagonia. This time she visits the seedy side of Buenos Aires at Feria la Salada, otherwise known as the Thieves Market. She won’t be going back…

Becky Garrison, author of Jesus Died for This? tries a pilgrimage to Glendalough in Ireland and finds that it’s going to take some effort to get away from the tourist hordes.

I cue up a worthwhile trio of world music from Brazil and central Africa, while Susan Griffith handles the travel book reviews: two on expatriate experiences in Europe, one with a travel quote for every day of the year +1.

Also we’re giving away a grab bag of travel gear goodies. The newsletter already went out, but you can still join us on Facebook to get in on the action. See the home page for details: Perceptive Travel.

You won't believe your calculator if you figure this one out. But nice ribbons!

Currency exchange rates can make a huge difference in prices where you are going. Travel prices fluctuate a lot because of this and the exchange rate can take a country from a decent value to being way overpriced in the case of just a few years. It’s happened to Australia, Brazil, Canada, and South Africa most recently, and plenty of others before that. Here’s what to keep an eye on in the current roller coaster climate of global finance.

At least consider a package deal for a short trip

The only true way to protect yourself from currency fluctuations, really, is to buy some kind of package deal in advance that removes all variables. You pay one price for everything (or close to it) and you don’t have to worry much about rates on the ground once you get there. It’s one of the main reason some people like cruises: they know everything they’re going to get and roughly how much it’s going to cost them. No adventure, but no surprises either.

If I were advising a relative on a vacation to Europe anytime soon, I’d definitely tell them to get a package tour. Ironic and annoying as it may be, that bundling often makes it cheaper than being an independent traveler: the tour agency is negotiating lower group rates on flights, hotels, transportation, and meals. I can do better than them in a cheap country by being smart, but it’s tough to do better in an expensive one that requires a long flight, like Italy, Japan, or Australia. (For example, Budget Travel’s website recently listed a 7-day tour of Copenhagen and Stockholm for $1,187 from NYC per person: flights, fuel charges, hotels, breakfast, and taxes. Try working that out on your own.)

U.S. dollar vs. Swiss franc, past two years

Avoid Switzerland for now

Switzerland has never been a bargain, but suddenly it’s up there with Japan for the title of most expensive destination. That’s because the inability for the U.S. Congress to act like adults when managing their budget led to a downgrade of U.S. debt. (Despite what some think, all budgets have two sides to the ledger: spending AND revenue.) That left the Swiss franc as the only currency looking rock solid. Which means lots of countries and investors are buying Swiss francs by the bundle. In a big country, this wouldn’t matter, but for tiny Switzerland, it’s a disaster. It’s made the value of their currency rise by a third.

Check out this PlanetMoney podcast if you want the whole story, but the bottom line is an already expensive place just got crazy expensive. Ski elsewhere this winter.

Where have we been before?

It makes lots of sense to check historic exchange rates here. Thailand has been at 40 baht to the dollar and it’s been at 30. Your perception of what a screaming bargain this country is will be a whole lot different depending on what the rate was when you were there. When I first visited Canada many years ago, 70 U.S. cents bought one loonie. Now they’re at par, with the Canadian dollar slightly higher as I write this. Some things already seemed expensive at the lower rate—like cigarettes, music, books, restaurant meals, and beer. So imagine how it feels now. On the other hand, Mexico at 12 pesos to the dollar felt a whole lot better than the first time I went there, when it was 10 to the dollar. If the rate is good now, or if it’s going through some crazy up or down move that’s out of the norm, you’ll know what to do, based on how badly you want to go there right now.

Are they tied to the dollar?

As noted in this recent post on how you would think Africa would be a cheap travel destination, but it’s not, where the currency is pegged to matters a lot. If it tends to follow the euro, that’s different than if it follows the dollar. This matters in Africa, it matters in the Caribbean, and it matters in Asia: in all these places one country may be following the Euro, while one right next to it may be following the dollar or even the pound sterling.

Which brings us to Latin America. It used to be that all these countries moved in lockstep with the U.S., so the rates barely budged. That’s still true in some that use the dollar (Ecuador and Panama) and others that might as well, they track it so closely (like Honduras and Belize). There are a few outliers though, resource-rich countries with booming economies that are floating their own boat on the international exchanges, most notably Brazil and Chile. It’s been a good while since either of those were a bargain—though Chilean wine remains a fantastic value. And you should have lots of Brazilian music in your collection, of course.

Overall though, in a world of uncertainty, these are your best bets for stability for those making their money in U.S. dollars. These economies are strongly tied to the U.S. and their people are getting lots of remittances from relatives working there. Huge spikes or declines in the exchange rate don’t do anyone any good. So “steady as she goes” seems to be the mantra. You won’t get any big nasty surprises going to any of the Latin American countries profiled in The World’s Cheapest Destinations.

Here’s a chart on Argentina though, for comparison purposes. It’s not as dramatic as it seems if you look at the change in percentage terms, plus inflation there has eaten up much of the gain. And now the government is charging you $140 before you even leave the airport. Even factoring in all that though, it’ll certainly cost you far less than the country profiled in the other chart above. That’s really the key point: keep it all in perspective because the cheapest destinations will usually still be a better value than the most expensive ones, no matter what kind of European meltdown, Asian currency crisis, or political posturing in the U.S. is going on.

Dollar vs. Argentine peso, past two years

I get asked for travel advice a lot: from friends, from readers, from random strangers at cocktail parties. That’s okay. I enjoy helping out. Most of the questions are the same: the cheapest places to travel, how to save on airfare, and how to get a better hotel for a better price.

Here are some answers to the questions I don’t get asked though. There are a few random lesser-known deals and freebies out there for those who are really looking to make their travels a better value or have a more pleasant experience every time.

Loyalty and Credit Card Goodies

First of all, if you want to really fly free more, check out this recent blog post on racking up frequent flier miles. But apart from getting a free flight by signing up for the right credit card (something I’ve done three times now), cards affiliated with airlines often come with something else thrown in. At the least you’ll get more miles/points for using the card to book tickets. On some though, like Continental’s, you get to check an extra bag for free. That’s huge, especially if you have a family or a spouse who couldn’t pack everything into a carry-0n if her life depended on it.

I pay more than $400 a year for an American Express Platinum Card. Being the cheap bastard I am, you know that it’s gotta hurt for me to send them that much money. So why do I do it? The main reason is I get to use the airport lounges of several different U.S. airlines AND I can bring my wife and kid in the lounge as well—or one guest. There’s also a dedicated lounge in the Mexico City airport just for people with high-end Amex cards. As in the Continental lounges, that means free Wi-Fi, snacks, and beer/wine/cocktails. The other perks the card gives (including a mileage program that ties into multiple airlines and hotel chains) are the icing on top.

Going Up a Class in Ground Transport Means More Goodies

The difference between an air-conditioned express train in India and a 2nd class sleeper is like the difference between a 4-star hotel and a $5 a night hovel. Real sheets, waiters, guards to keep the bag-slashing thieves at bay, and toilets that are almost usable.

If you take a first class or executive class bus in many Latin American countries, you’ll get a lot of extra goodies for your pesos. Besides more legroom and better seats, you’ll usually wind up with a snack, something to drink, men/women bathrooms in the back, and Wi-Fi in a dedicated lounge at the station or even on the bus. Heck, in Argentina you’ll probably get champagne!

You Can Book Almost Anything Cheaper Locally

I understand why people book adventure tour vacations from home with a company in their home country. (And some of the small group tour companies are a good value.) But if you’re watching the budget and your schedule is not super-tight, you’re almost always better off skipping the middleman and booking adventures locally. In the old days that meant just showing up and walking into offices—which still works—but now you can frequently work out that rafting, trekking, and zip-lining in advance online or via Skype.

Often you’ll be using the same local company as you would have if you had booked it through an agency in your own country, just without the hand-holding and the doubling in price. Here’s an oldie but goodie on the subject: Book Adventure Travel Locally and Save.

Finding Wheeling/Dealing Hotels Isn’t Hard

When most people book a hotel, especially in the U.S. or Europe, they go to one or many of the booking sites like Expedia, Travelocity, or Hotels.com. That’s all well and good if you want something really specific or you’re especially picky. Otherwise, why pay retail?

Unless we’re in a boomtime or there’s a special event going on, very few hotels are even close to full on any given night. This means hotels are constantly selling rooms well below market rate, but not through those regular channels. The most common way they up the occupancy is by putting inventory through Priceline or Hotwire. See links here to those hotel deal sites , but also the message boards where you can find out what other people ended up with—and what they paid. This way you’re not flying blind on where you’ll spend the night. Believe me though, the savings can be huge. I’ve routinely paid 40-60% less than what was on Expedia for the same hotel, at every star level.

I’ve also had luck using SkyAuction.com for resort areas and people in a higher budget range than me swear by the deals they’ve found on LuxuryLink.com. I’ve had friends score great last-minute package deals too. Most of the sites that specialized in this have folded or been bought out, so now you see them on the big booking sites or on “flash sale” sites like Jetsetter or SniqueAway. This works especially well if you just want to get away for a few days or a week, but you’re flexible on where to go.

And remember, in much of the world, your rate is negotiable.

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Here’s an interesting article I got quoted in that came out recently: How to make bus travel bearable. It’s on the Fox News site, of all things, but hey—they weren’t asking for my political opinion.

I haven’t been on a Greyhound bus since I was a kid, but I take buses all the time when I’m in other countries. When I was backpacking around the world the experience wasn’t always pleasant, but now that I’m dashing off on shorter trips or am working (like I was in Korea when I rode nice ones there), I get to take the best class available.

It’s a cheap splurge. If you’re in a country where even the business travelers go by bus, as is the case in a few places mentioned in that article—like Mexico and Turkey—it’ll feel like business class on a flight. As I’ve said before, Mexican buses rock. More on that in the article linked above.

Thankfully, things are getting better in the U.S. on this front. Sure, I’d much rather see a robust high-speed train system, but that’s not getting here anytime soon. So meanwhile, with Greyhound finally getting some competition on heavily traveled routes from the likes of Megabus, they are starting to refurbish their fleet. Perhaps someday a few years from now we’ll be able to say, “Remember when buses didn’t even have Wi-Fi?”