Strong Dollar Makes World Travel Cheaper for Americans

If you’ve been putting off a trip abroad because it’s too expensive, start packing your bags.

A stronger dollar has reduced the price of travel, from a hotel room to a meal, in much of Europe, Japan, India and elsewhere.

“This is one of the best times for Americans to travel in years,” says Matt Kepnes, author of “Travel the World on $50 a Day” and other travel books.

WHY THE DOLLAR IS STRONG

Other economies are shaky, making their currencies less valuable. Europe is barely growing. Japan is already officially in recession. China’s growth has slowed. Meanwhile, the U.S. economy has been chugging along, and the dollar has gained, too. Many economists expect that steady U.S. growth will compel the Federal Reserve to raise interest rates later this year, making dollar investments more attractive and leading traders to sell other currencies and buy dollars.

WHAT IT MEANS

Let’s say that in June, you had a dinner for two in Paris for 75 euros. It cost $103 then; today, it would be $89. Expensive countries may not be cheap, but at least they’re more affordable now.

BEST BARGAINS

Thanks to the pound’s decline, England is cheaper than it was six months ago. But the euro has slumped more, making most of continental Europe an even better bargain. Kepnes says Greece is attractive right now because hotels and tour operators have been slashing prices to fill rooms. The same thing is happening in Portugal and parts of Spain.

“Be the contrarian traveler,” says Kepnes. “If you want to go to Europe, consider eastern or central Europe, where prices are generally cheaper,” he says. He recommends going during the “shoulder season” – late spring or early fall – rather than in summer, which is peak season.

WHEN TO BOOK A FLIGHT

Demand for travel is so strong that most airlines don’t have to cut prices to sell seats.

“The summer fares are still very expensive,” says George Hobica, founder of travel website airfarewatchdog.com. But airlines might cut prices this spring if the strong dollar discourages Europeans and Asians from flying to and from the U.S.

CONSIDER ALL THE OPTIONS

Hobica recommends checking foreign airlines. They sometimes offer better prices to Europe than U.S. carriers do, although they could include a distant stopover.

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AP Markets Writer Matthew Craft in New York contributed to this report.

This article appeared in print in the January 6th, 2015 edition of Hamodia.