What happens to the travel landscape when Europe seems dangerous, the pound and euro plummet, and the price of jet fuel stays low?
If you’re looking to splurge on travel, those factors can mean that a summer vacation in Europe is a lot less pricey this year. The dollar is holding strong for a whole lot of behind-the-scenes economic reasons, so if you’re an American and you don’t go abroad this year, you may have missed the best opportunity for a decade or two.
Pricey Destinations for Less
There are two ways you can play it if you’re earning a strong currency. You can go to the cheap places that have gotten even cheaper and stretch your budget far, or you can go to some dream destination that’s usually out of your price range and take advantage of the temporary dip.
I give plenty of advice on here regularly about the World’s Cheapest Destinations, but I don’t talk so much about the pricey places. This year, however, would be a great time to hit England, France, Italy, Norway, or Japan.
That chart above shows how the British pound sterling has performed the past couple years, with a clear drop after the Brexit vote. Markets think the UK’s economy will take a major hit (many financial firms are already leaving) and Scotland wants to break away to join the EU. So the pound is probably not going to recover anytime soon. That sucks if you’re British, but it’s great if not and you’ve always wanted to visit London or Wales. My mother-in-law is taking advantage of this and flying there with my daughter in early June.
A few years back you had to trade $135 to buy 100 euros, but now they’re almost at parity. Combine that with lower airfare costs to get across the Atlantic, more competition from the likes of Norwegian Air, and terrorism worries after repeated attacks and this is a great time to visit Paris. Or Stockholm. Or Barcelona. Yeah, they’ll still probably be packed with tourists, but the numbers will be down a bit at least and so will prices.
Check flight prices across Europe from your own airport here.
Where Travel Prices Have Returned to Earth
I wrote a post a few years ago about how crazy expensive Chile felt when I was in the Atacama Desert region. Now that the Chilean peso’s value has dropped 25% since 2013, it’s a whole different story. If Patagonia or Chilean wine country are on on your bucket list, this should be your year to make it happen. The same goes for once-ridiculous Brazil, which is now far more reasonable.
Australia got into the nutty zone for a while as well when commodity prices were high and the currency was at parity with the greenback, but now it has fluttered back down to Earth. You’ll still spend more there than you would in the USA, but it’ll feel like New York City prices in Sydney instead of some place from an alternate universe.
Japan is never really a bargain, but when a buck only got you 80 yen as it did five years ago, visiting Tokyo was especially painful. Now that the rate is around 110 to the dollar instead, that bowl of restaurant ramen noodles seems almost reasonable.
It’s the same story in Norway, another perennially pricey destination that’s never going to feel like a deal. As recently as 2014 you only got 6 krone for $1. Now you get more than 8, a one-third rise in purchasing power. You’ll still pay a fortune for your hotel or adventure tour (and you’ll find the world’s highest beer prices), but at least it won’t require a second mortgage to visit.
Are you planning a special trip this year to take advantage of increased buying power?