That dream vacation may be a lot more affordable this year. Thanks to the historically strong U.S. dollar, many travel industry professionals say 2015 may be the best year in recent memory to travel abroad.
“The U.S. has emerged from the financial crisis of 2008 with the dollar at near-record highs relative to a number of international currencies,” says Travis Katz, co-founder and CEO of Gogobot, a travel reviews website based in Menlo Park, California. “For American travelers, that means international travel is cheaper this year than it has been in decades.”
You may need to pounce
Of course, exchange rates aren’t set in stone; travelers should be aware that currencies can change quickly. For example, a surprise decision by the Swiss National Bank recently sent that country’s currency soaring against the euro.
“Within 24 hours,” Katz says, “the cost of big-ticket items, like hotel rooms and ski resort passes, jumped nearly 50 percent for tourists.”
That’s an extreme example. Still, Katz says the best thing is to book your vacations as soon as you can to lock in low prices resulting from exchange rates and news events such as the Greek crisis.
See how to get the most from the strong greenback.
If you’ve always wanted to travel to Europe but the price tag scared you off, now may be the time.
“Basically, Europe is currently on sale,” says Nigel Osborne, a vice president with tour operator Keytours Vacations International. “Usually, Europe can be quite expensive for Americans, because of both the exchange rate and the cost of goods and services in those countries.”
Think beyond Paris and Rome
For the best deals, many travelers are seeking out cheaper eurozone countries, such as Spain and Greece, which was a bargain even before the recent financial drama. To really stretch that strong dollar, go beyond the eurozone.
“There are even bigger savings the farther east you go,” says Charles Neville, marketing manager of JayWay Travel, a travel company specializing in Central and Eastern Europe.
“Countries like Croatia, the Czech Republic, Hungary and Poland represent even better value because their currencies have dropped against the dollar, and they’re usually cheaper in terms of food and lodging,” he says.
With a strong dollar, it can be tempting to travel to a far-off locale, but travel experts say it would be a mistake to overlook the countries just over the U.S. borders.
“A trip to Canada is about 20 percent cheaper than it has been in the last three years,” says Maureen Gordon, co-owner of Maple Leaf Adventures in Victoria, British Columbia. “That’s huge, and it’s all because of the strong U.S. dollar.”
Bigger bargains than usual in Mexico
American travelers also can expect a big discount on travel to Mexico, thanks to the dollar’s performance against the peso, says Sheridan Samano. He’s the co-founder of Reefs to Rockies, an ecotourism company in Denver.
“On our recent trips to Mexico this year, the value of the U.S. dollar meant we were getting about 20 percent more for every dollar spent, compared to travel to the same locations last summer,” says Samano.
Plus, costs are generally lower in Mexico than at home.
“The biggest savings comes from what you buy locally,” says Samano. “So, a strong dollar in a country with lower costs can go a very long way.”
The strong dollar is contributing to hotel bargains for American travelers.
A study from travel reviews website TripAdvisor says the average room rate in Europe is down 9 percent from 2014. Russia has seen Europe’s biggest drops, with rooms down 45 percent this year to an average of $80 a night.
But travelers should expect to pay less for hotels just about anywhere in the world. Hotels in Africa and the South Pacific have year-over-year price declines of 8 percent.
How to book with confidence
You can trust that you’ll get the correct exchange rate if you book with a major hotel chain or through an online aggregator, says Gautam Lulla, president of Travel Tripper, a New York technology company specializing in hotel booking systems.
“Most hotel booking engines have the option to show the price in the currency of their choice,” says Lulla. “The prices are converted by standard exchange rates, so whether it’s listed in euro or dollar, it will cost you the same amount.”
To make your strong dollars go even further on a trip abroad, travel in a group.
Typically, that means taking a tour through an established tour operator. If you have enough people — say two or more families — you might also ask airlines and hotels if they offer a discount for a large booking.
“It’s always worth investigating a group-travel option, because the buying and booking power of group-travel companies yields better value for the traveler,” says Osborne. “Airfare, hotel and tickets to tourist attractions like museums and historic sites often cost less when bought in bulk.”
Many flavors of tours
A tour can be a good option for travelers who have limited time, he says, because tour companies run on pretty tight itineraries. And don’t assume that a tour just isn’t for you, because tour operators run the gamut in terms of price, service and style.
“It’s worth looking around, because even people who say they don’t like tours can usually find an operator that fits their taste and budget,” says Osborne.
As you plan your vacation, it’s important to ask the issuing financial institutions about foreign transaction fees on your debit and credit cards.
“Foreign transaction fees can wipe out a lot of the benefits of a strong dollar,” says Sarah Schlichter, senior editor at IndependentTraveler.com. “Thankfully, banks and credit card companies are required to disclose those fees.”
For credit cards, foreign transaction fees can hit you for as much as 3 percent. That might not sound like a lot, but when you consider the total cost of a vacation, those fees can sting.
Practice debit card diligence
If you’re planning to use your debit card at ATMs overseas, your bank may charge a few dollars on top of whatever fees the local bank levies.
“It’s a good idea to take out as much cash as you feel comfortable holding,” says Schlichter. “That way, you cut down on the number of times you get hit with a fee.”
You may decide to look for cards with low or no fees.
“If you only travel once a year, it may not make sense to change your credit card or (debit card),” Schlichter says. “But frequent travelers should absolutely look for no-fee options.”
Usually, the single biggest expense for an international traveler is the plane ticket. The dollar’s strength hasn’t made much of a dent there, says Greg Geronemus, co-CEO of smarTours, a New York-based travel company.
“International carriers price tickets in U.S. dollars, so a strong dollar doesn’t help with airfare like it does with other purchases,” says Geronemus.
He cautions that you shouldn’t plan your vacation around the cheapest possible fare.
“Ultimately, you have to be excited about where you’re going,” he says.
Book as if you’re outside the US
You might cut the cost of a plane ticket by booking online and letting the website think you’re booking from outside the U.S., so you can pay in the foreign currency.
Writing at travel tips site Map Happy, Erica Ho says she found that by changing the “point of sale” to the destination country, the same flights tended to be cheaper than if she said she was in the U.S.
Ho points out that the trick requires some effort. And while the savings can range from “a few dollars to over a hundred dollars,” the trick “doesn’t always work all the time.”