Balancing a limited budget and scary economic times with good old wanderlust (and excellent-value travel) is no easy task. Finding cheap airfare and good rates on hotels makes a difference, and so does stretching each and every vacation dollar with a favorable exchange rate in the country you visit.
Hotel stays, shopping excursions, attraction tickets, and dining out all become significantly more affordable when you've got a decent exchange rate on your side. For instance, every $10 you would have spent last summer on a trip to London would only cost you $7 now. That's a savings of $300 for every $1,000 spent!
Here are some of the places you can find good exchange rates right now, and hopefully in the coming months as well.
In July, one British pound was worth about $2 U.S. However, since early November, the pound has been hovering between $1.40 and $1.55, a more than 25-percent drop. In recent days, it has dropped even more, to under $1.40. In fact, this has been the sharpest drop in at least 50 years, according to MarketWatch, and brings exchange rates down to 2002 levels. However, some analysts think the pound will rebound in 2009, which means these excellent exchange rates may be a limited-time offer for Americans traveling in Britain.
Sales from many major carriers put the U.K.'s excellent exchange rates within reach, even for travelers on a tight budget. For instance, British Airways has sale fares such as $292 round-trip plus two-nights' accommodations between New York and London, or $386 between San Francisco and London. Delta and US Airways have also recently advertised sale fares on transatlantic flights.
There are plenty of reasons to visit the U.K. this year. In London, events at Hampton Court Palace and the Tower of London will mark the 500th anniversary of Jonathan Rhys Meyers, er, Henry VIII's accession to the throne. 2009 is also the 250th anniversary of Kew Gardens and the 200th birthday of Charles Darwin. Scotland is staging a year-long Homecoming Festival featuring the largest ever Highland games, golf, whiskey (or "whisky," as it is known in Scotland), performance, and music.
Editor's Note: The financial situation in Iceland has led to the collapse of the country's government. At press time, the situation was still peaceful and safe for visitors, and we'll cover any travel-related news in Today in Travel as it develops.
Last fall, we featured Iceland as a top bargain destination because of the sharp drop in its currency brought on by the collapse of the global credit market. Since then, the Icelandic krona has weakened even further. And while that's bad news for Iceland, it does mean that visitors can literally double their money.
When we last wrote about Iceland, the exchange rate was about 90 krona per dollar. This month, the rate hovered above 120 krona to the dollar. Year over year, that's twice the spending power: In January 2008, you could get just 63 krona to the dollar. But if you're considering a trip to Iceland, don't take the favorable exchange rate for granted. This month, Iceland's government may discuss the possibility of joining the European Union, which could mean an eventual switch to the euro.
Icelandair is making it affordable to visit in the coming months. Airfare starts at under $450 round-trip from New York. The airline also has packages that offer unusual value. For instance, the Winter/Spring Budget Getaway includes round-trip airfare from Boston or New York, two nights' accommodations, and daily breakfast for $479 per person. Icelandair also recently announced it would cut its fuel surcharges by $58 on round-trip flights.
Winter in Iceland means short days, but there's still plenty to do with your time. Smarter Travel Executive Editor Anne Banas recommends a winter trip to the Blue Lagoon geothermal-heated pools, where you can soak outside in the warm blue waters as the snow falls. Indoor attractions such as museums, the spaceship-like cathedral, and the robust nightlife scene keep a winter trip interesting. Skiing, glacier tours, swimming (in heated outdoor pools), and ice-fishing are among the other winter outdoor activity possibilities.
With all of its ups and downs in the last six months, the euro is more well-traveled than most frequent flyers. The average euro exchange rate in 2008 was $1.46, while this year, the average is around $1.35. At press time, the euro had dropped to $1.28. Recent economic news has led some analysts to predict a drop in the euro to $1.20 by June. And while there's no guarantee that the dollar will be able to maintain its advantage in the coming months, it's very possible that summer travelers to Europe will be able to maximize their dollars.
Exchange rates aside, there's also the very real phenomenon of people spending less, and that means fewer U.S. visitors heading to Europe. Lower year-over-year visitor numbers from the U.S. to Europe seems like a trend that's likely to continue at least through this winter and spring. Airlines are trying to compensate for the drop in traffic with sales galore. For example, SmarterTravel.com sister-site Airfarewatchdog.com just reported last week that fares to Europe had suddenly dropped 50 to 60 percent. Fare cuts this dramatic are never around for long, and as Airfarewatchdog noted, this one was gone quickly. So, the time to take advantage of them is now (or five minutes ago).
Unlike many currencies, a favorable exchange rate for the euro offers travelers the choice of not just one but many countries to visit. Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Spain use the euro.
More Strong Dollar Destinations
Looking to make your U.S. dollars go farther abroad in the coming months? Then consider:
- Australia: In 2008, the Australian dollar was worth an average of $1.19 for every U.S. dollar, whereas in late January of this year, a U.S. dollar was worth $1.53 Australian.
- Mexico: Back in July 2008, you could get around 10 pesos to the dollar. In late January, that number jumped to almost 14 pesos to the dollar.
- Jamaica: The Jamaican dollar is about 13 percent weaker compared to the U.S. dollar than it was six months ago.
- Argentina: The Argentine peso has dropped 15 percent against the U.S. dollar in the last six months.
- Hungary: Six months ago, a dollar was worth 150 Hungarian Forints, whereas now you can get around 220 Forints to the dollar.