You know the U.S. dollar is in trouble when a number of businesses in New York City now accept the euro for payment, and when the U.S. dollar is no longer accepted at places like the Taj Mahal in India. In fact, the greenback continues to depreciate against the euro, the Indian rupee, even against the Chilean peso.
A sinking U.S. economy and an increasingly weakened U.S. dollar abroad — is it all doom and gloom for traveling in these touchy economic times? Not necessarily. You need to know — and go — where the dollar is not just strong, but still king. If at all possible, you need to get your trip priced — and then locked in U.S. dollars. You then need to hedge your travel budget against currency fluctuations, and then, once overseas, you need to figure out how to save on mass transit and other attractions, and use your ATM card when you need cash.
First, let's start where the dollar is still king.
Yes, there are still countries and destinations where the U.S. dollar is strong. From the Caribbean and South America to Asia, there's still hope for an affordable vacation.
For starters, one of my favorite destinations — and a real bargain: Argentina. The U.S dollar still gets you 3.15 Argentinean pesos — and that's a great deal. Result: not just affordable hotel rooms, but really affordable restaurants. A dinner at one of the city's best restaurants —think porterhouse steak, Malbec wine and dessert — runs about $18 a person. And that's at one of the city's best restaurants! But everything else is for sale as well — leather goods, clothing, art and artifacts and antiques. If there was ever a time to spend your summer trip doing your Christmas shopping, Argentina is my choice (Ecuador gets an honorable mention, because its currency has been based on the U.S. dollar; there's also Belize and Panama).
Historically, as the U.S. dollar goes, so goes the Jamaican dollar — or worse. Lately, the Jamaican dollar has dropped more than the U.S. dollar. Translation: Jamaica is still an affordable destination.
No, I'm not suggesting that totally upscale hotels like the Sandy Lane are ever really affordable, but the country as a whole is still a great bargain. Its currency, the Barbadian dollar, has only increased about 2 percent in value against the dollar in the last five years, so that's a good sign. And hotels on the windward side of the island go for about $180 a night for a room, and that's a great deal.
The euro keeps rising; it's been as high as $1.52 in recent weeks. This is the real challenge for Americans insisting on that European vacation in 2008. Some American travelers who do not want to be denied their European experience are simply choosing to go to countries like France, Spain, and Italy but to spend fewer days.
Here's another, perhaps better idea: Head to the countries in Europe that haven't yet embraced the euro. Switzerland is one; the exchange rate is just $1.12 Swiss francs to the dollar. Other countries not yet on the euro: Romania, Bulgaria and Turkey.
A great destination made all the more attractive because its currency — the dinar — has remained at 71 U.S. cents for more than five years.
Second, hedge your travel budget by getting it locked in U.S. dollars. Most tour operators tend to set prices about 18 months ahead of time, in U.S. dollars. That's a good thing. But one note of caution: Some U.S. tour operators are now trying to tack on "currency surcharges." In many cases, these are negotiable (surcharges average about 5 percent). So if you don't ask — or negotiate — you might be hit with one.
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Getting a rate locked in U.S. dollars also applies to reserving a hotel room. Hotels ranging from St. Barts in the Caribbean to France that are favored by a large American clientele have begun offering rates locked in dollars. Again, if you don't ask, you won't get. This can represent a huge savings. One hotel in London offers a three-night stay, including airport transfers, for $1,400. But if purchased in British pounds, the same stay, exclusive of the airport transfers (which are a real bargain, considering that a London taxi ride from Heathrow to your hotel can easily cost $130 each way), would cost 855 British pounds, or about $1,700.
If you choose to take a cruise to Europe — or through it — it will be priced in U.S. dollars, as are the shore excursions and tours from the ship. Book all of that ahead of time, minimize your purchases on the ground, and you'll maintain a handle on your travel costs.
And if you need to get around those expensive foreign cities, not to mention a few in the U.S. that can also be expensive, explore the use of promotional city cards:
Cities around the world offer city cards to tourists that promise savings through discounts on tourist spots and transit.
From Australia to San Francisco, city cards offer free or discounted access to a city's landmarks and public transportation. Sounds great, right? In some places, it is. For just $25 per adult with up to three kids included, the Berlin Welcome Card features reduced admissions to city attractions plus two days of unlimited public transit usage. The transit would be about $15 by itself, so you're well on your way to getting your money back there.
The Sydney Pass in Australia also gives you a decent discount. The $275 three-day family pass may sound daunting, but for a family of five it beats the cost of paying individually for airport transportation and two popular hop-on, hop-off sightseeing bus tours. Plus, you get discounts at many attractions and unlimited use of the city's public transportation.
The Paris Museum Pass costs around $15 a day if you buy the six-day version. After all, you'd pay just nine euros ($13) for a visit to the Louvre and gain access to the less crowded Eugene Delacroix Museum, too.
The 72-hour Zurich Card, in Switzerland, costs around $30 and offers unrestricted public transportation, free entry to more than 12 museums, a free one-and-a-half hour cruise on Lake Zurich and complimentary welcome drinks at 20 restaurants.
One last tip: Want to save even more money? Don't exchange U.S. dollars overseas. You'll get killed two ways — higher exchange rates and commissions from the money changers. Instead, use your ATM card to take out only the amount of foreign cash you might need at any one time. You get the exchange rate the bank gives its own customers, you take out only what you need, and you're not carrying around huge wads of cash. There are now a number of banks, financial institutions and brokerage houses that offer no-fee ATM cards — and if there was ever a time to have a no-fee ATM card, this is that time — when you're traveling overseas.
Peter Greenberg is TODAY’s Travel editor. His column appears weekly on TODAYshow.com. Visit his Web site at PeterGreenberg.com.
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