What happens to the travel landscape when the U.S. dollar surges on the world market?
It might not be good news for the stock market, but it’s great news for American international travelers.
If you’re looking to splurge on travel, a strong dollar can mean that a spring or summer vacation in Europe may be a lot less pricey next year. If you want to go skiing in France or make that big trip to Australia and New Zealand, this could be the time to start making plans. The dollar is at or close to record levels against a lot of currencies again, so if you’re an American and you don’t go abroad in the coming year, you may have missed the best opportunity for a decade or two.
Pricey Destinations for Less
There are two ways you can play the travel better game if you’re earning money in greenbacks, two ways to win when the trade is going your way. You can go to the cheap places that have gotten even cheaper and stretch your budget far. Right now the dollar is a record high against the currencies of Nepal, India, Argentina, Hungary, and Indonesia to name a few.
Or you can go to some dream destination that’s usually out of your price range and take advantage of the temporary dip. It still won’t be cheap, but the prices will sting a lot less than usual.
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. It’s looking like a great time to lock in prices for a vacation to Sweden, Norway, Australia, New Zealand, western Europe, or Canada.
That chart above shows how the Australian dollar has performed against the greenback the past five years. You can see how vastly more you will get for your money now compared to just a few years ago. The New Zealand dollar has followed a similar pattern, so this winter (their summer) would be a great time to head to the other side of the world.
When I was in Sweden two years ago, prices there felt about the same as New York City’s, but with cheaper hotels. Now that the dollar is trading 10% higher than it was then, Scandinavia is not looking all that pricey. Check hotel rates here for Stockholm.
A few years back you had to trade $135 to buy 100 euros, but right now you only have to trade $113 for 100 euros. Combine that with lower airfare costs to get across the Atlantic thanks to budget carriers like Norwegian Air, Wow Air, and Edelweiss, there are more frequent sales from all carriers across the Atlantic. So 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 in the off-season 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 now that the real has dropped 50% in five years.
Great Britain is still struggling with Brexit unrest on the international currency markets, so that trip to London is not as dear as it used to be. Five years ago it took $1.60 to buy one pound sterling. Now it costs you $1.30 or less.
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 bouncing 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 in the coming year to take advantage of increased buying power?