The path of a dollar in Hungary
When a place is getting bad press, do you follow the sheep who run away? Or do you act like a contrarian traveler and take advantage of the temporary opportunity?
Like an investor who shuns the hot stock at its peak and buys the out-of-favor values for bigger returns, the biggest payoff for your travel budget comes when you don’t do what the herds are doing. If everyone is flying to the same place at the same time and you join them, you will pay the maximum. If you’re going where the hotels are half empty, you’re in a much better position of strength.
I wrote a year ago about how there was a great opportunity to take advantage of currency drops in Argentina, India, Indonesia, and Mexico. But you know what? A year later, the situation for U.S. dollar holders is even better in Argentina, about the same in India, better in Indonesia, and way better in Mexico. If you didn’t take advantage of the situation a year ago, you’ve got some extra time.
The list of opportunity targets has broadened, however, as the U.S. economy recovers and Europe deals with deflation. The euro fetched $1.60 back in 2008 and is now at $1.18. Goldman Sachs made the bold prediction this week that the two currencies will reach parity by the end of the year. That’s great news for anyone heading to pricey Western Europe. If you’re going to one of the cheapest destinations in Europe, it means the backpacker prices in these countries are going to edge closer to those in Asia and Latin America. But with better beer and wine to choose from.
The stronger dollar is also making some other destinations 10-25% more reasonable than they were a couple years ago, including Chile, Colombia, and Canada.
Beyond currency fluctuations, however, look at the international news with a speculator’s eye. If people who can’t read a map are avoiding Africa because of a virus that’s only in one tiny speck of the continent, smarter travelers can get the best deal in a decade on a trip to Kenya, Tanzania, Namibia, or Botswana.
If the majority has taken Honduras off their list because the two big cities are drug gang battlegrounds, a street-smart traveler can find the best scuba diving deal in the Caribbean on much safer Roatan or Utila.
If the western world is avoiding any place sounding vaguely Islamic because of the religion’s fanatical side embracing violence so readily, travel to calm Jordan or Morocco and enjoy the savings.
Meanwhile, I’ll be kicking back in Mexico enjoying my half-price life and an unusually good exchange rate, laughing as clueless people from cities with far higher homicide rates than mine ask me, “But is it safe?”