What the strong US dollar means for Americans traveling to Europe this year
Americans traveling to Europe this year will finally have a little relief at the register, or at least a smile on their faces when they examine their credit card statements once they get home. The euro has fallen significantly against the dollar in the past six months, tumbling down to US $1.17 for 1 euro as of yesterday, a level not seen since 2006.
This exchange rate brings it back to its valuation when the currency debuted in 1999. But wait, there’s more: According to news reports yesterday, Goldman Sachs predicts that the euro could drop to $1.08 by the end of 2015, and be equal to the dollar by the end of 2016 (something that hasn’t happened since the euro’s biggest dip in 2002).
This is quite a change for a currency that was valued as high as $1.60 during the summer of 2008, and hovered in the $1.30s for much of last year.
Price drop for US travelers
So what does this mean for US travelers to the Eurozone countries? Certain things are obvious: Everyday charges will be cheaper, in dollar terms. Some examples of how this might affect your trip:
- €65 dinner for two. July 2008 = $104. January 2015 = $76.05
- €120 hotel room, per night. July 2008 = $192. January 2015 = $140
- €11 museum entry. July 2008 = $17.60. January 2015 = $12.87
- €8.20 hot chocolate at Angelina in Paris. July 2008 = $13.12. January 2015 = $9.59
You get the picture: Americans have much more buying power in Eurozone countries. And you don’t need to go all the way back to 2008 to see dramatic savings, as the euro was nearly $1.40 as recently as the spring of 2014.
Business Insider illustrated the dramatic euro-to-dollar dance in this post yesterday.
A quick refresher: As of January 2015, the euro is the official currency in the following 19 countries:
Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. It is also used as a currency in Andorra, Monaco, San Marino, and Vatican City.
But wait: Switzerland just got more expensive
Meanwhile, Switzerland is (as always) a different story. Just today the country’s central bank removed a limitation on how low the euro could trade against the Swiss franc. This move is currently pushing the Swiss franc higher–and thus making the already pricey country even more expensive to visit for basically everyone in the world who isn’t Swiss.
What about airfare?
It will be interesting to see what effect, if any, this currency fluctuation will have on the price of airfare. Even with the dramatic plunge in the price of oil and gas, airfare prices have remained maddeningly expensive. It seems that the big carriers are cashing in on their savings, and paying for new fleets and improvements, rather than passing on the savings to passengers.
Hopefully, some competition from the new low-cost carriers might bring a little competitive pressure into the US – Europe market. Stay tuned.
Our advice for US travelers
One piece of advice from the Cheapos: Hold off on pre-booking tours, rail passes, and other tickets through American-based agencies. Chances are you’ll be charged in dollars and they won’t be passing on the savings that the stronger dollar can bring to you. (They’ll probably be cashing in on it themselves!)
Instead, wherever possible, pay for things now in euros, and take advantage of the exchange rate. In this example, book your train tickets directly through the official European rail websites. (See tip #7 in this post, or just search online for “official railway site France”, and skip over the ads.)
And as far as sightseeing and other tickets go, you should probably just hold off on buying those until you’re on the ground. Not only will that give you more flexibility with your schedule, the dollar might even be stronger once you arrive.
Oh, and one more piece of advice for American travelers: It’s time to go.
Your thoughts: Is the currency change affecting your plans to travel to Europe?
American travelers, tell us about how this change is affecting your plans to head to Europe. And European and other non-US travelers, what impact, if any, is this having on your plans? Tell us in the comments section.
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Thank you for sharing this! I think I should plan a trip to Europe soon!
– The Southern Adventurer
http://www.thesouthernadventurer.com