Europe may be cringing. This is the year it may hear those dreaded words, “Yep, the Griswolds are back.” Thanks to a strong dollar and near record lows for the Euro, this is the best time in years for Americans to venture out on their dream European vacation.
It’s no secret that, generally speaking, Europe is one of the more expensive vacation destinations, with some cities being amongst the most expensive in the world. Europe has seen its share of economic problems over the past few years, though, and moves by the European Central Bank to help get the economy back in shape have resulted in a weaker Euro. Meanwhile, the American economy has been riding a wave of increased trade, something of a stock market recovery, and higher employment figures, all helping the greenback muscle up. The result: Your dollar goes further across Europe than it did even a year ago.
How much stronger?
To give you an idea how much stronger the dollar is this year, the Euro was trading around 1.38 Euro to the Dollar in April and May 2014. By mid-March 2015, that rate bottomed out around 1.04, and is still hovering below 1.1 Euro to the Dollar. That translates into a savings around 20%, provided the cost in Euros stays the same. For example, exchanging your dollars for, say, 500 Euro would have cost $690 last year, but only $550 this year. That, my friends, is a bargain.
This, of course, has mixed results. While it’s been good for tourism, it’s been ironically bad for foreign airlines as jet fuel is priced in US Dollars. Though the weaker Euro has largely been seen as good news for the European economy, the stronger Dollar is bad news for America in some ways. Many of the nation’s biggest corporations rely on Europe for as much as 40% of their sales, which have been declining. As with anything, there are winners and losers.
While the policy experts and economics academics debate the pros and cons, we have better things to do:
How Much Cheaper?
It can be very difficult to determine just how much less (or more) a vacation might cost compared to last year. We know crude oil prices have dropped, but experts say a corresponding drop in air fares is not likely. We know the Euro is weaker, but there have been some price increases on goods and services. Thankfully, the good folks at TripAdvisor are giving us a headstart with their annual TripIndex™ Europe report, which analyzes hotel prices and airfares to determine the base cost of a one-week vacation in several European cities. And the news is good! The report shows an average drop of 11% in the cost of a one-week summer trip to Europe, before adding in costs such as meals, ground transportation, and other vacation expenses.
For their report, TripAdvisor analyzed data for the period of June 1 to August 31, 2015. What they found is the average nightly rate for a European hotel booked through TripAdvisor for this summer is $133, compared to $164 for the same period last year. Roundtrip flights from the US to selected cities in Europe dropped from an average of $1,579 to $1,448 this year. To figure out flight prices, which are always volatile, TripAdvisor looked at fares from the 20 busiest US airports to the main airport in each city in the index, for travel between June 1 and August 31. If ever the phrase “your mileage may vary” applied, it certainly does here.
Where To Go
It seems like almost anywhere in Europe is a good choice, but there are some clear “loss leaders.” Istanbul, which has been a destination du jour recently, is now the most affordable destination in the index with prices tumbling 25% over the past year. (Similar to the Euro, the Turkish Lira has also been weakened, leading to the large drop.) Beautiful Stockholm has one of the least expensive average airfares, leading to a 23% cost reduction in the index, followed by Copenhagen and Oslo rounding out the four largest drops. Bucharest is also notable for having the lowest nightly hotel rate in the survey.
Historically expensive destinations, from Amsterdam to Zurich, may still be relatively expensive but are, at least, less so than last year. Most of the cities in the upper end of the cost range saw declines in the mid-teens, except for London and Zurich, the two most expensive on the list. While Reykjavik has the lowest airfare in the index, that is offset by the most expensive hotel rates, propelling the Icelandic capital to number three on the Most Expensive list.
Where NOT To Go
You have to feel for Russia these days. The world often seems against them and, when the country finally sees a positive, it’s really a negative. Moscow is in the middle of the pack for overall trip cost at $2,275.10, but it’s the only city in the Index to have gotten more expensive over the past year. This is because, while hotel rates there actually saw the biggest drop (-43%), roundtrip airfare saw a huge jump (+56%). That nets out to an increase of 8% in total trip cost. Russia, of course, has its own currency, the Ruble, which has been under increasing global pressure causing an ongoing weakening. It’s still a beautiful place to visit, just not the city to put at the top of your “Good Value” list.
Where will YOU go?
The TripAdvisor TripIndex Europe illustrates just how good a vacation value Europe may be this year. Prices are sure to fluctuate, and will be different outside of the major cities listed in the Index, but the effects of a weakened Euro are being felt across the continent, and economists expect they will persist well into 2016, possibly longer. The time to go is now, or at least soon. The only question is, where will you go? Let us know with a comment – we’d love to hear about your plans and experiences!
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