Euro-dollar parity makes travel to Europe cheaper, says expert
If you’ve ever dreamed of a trip to Europe, now is a cheaper time, experts say.
For the first time in 20 years, the euro and the US dollar have an exchange rate almost equal to one, reported The Guardian. The Euro has recently weakened while the US Dollar has strengthened as the currencies approach parity.
This conversion rate makes travel to Europe 10 to 20 percent cheaper for Americans, USA Today reported.
Why are the euro and the dollar almost equal?
The value of the euro has recently fallen due to the war in Ukraine, which has raised concerns about a possible energy crisis and recession across Europe, CNBC reported. Conversely, the value of the dollar rose due to interest rate hikes by the Federal Reserve.
Last July, 1 euro was worth about 1.18 dollars, according to data from the Federal Reserve. At the end of June 2022, 1 euro was worth approximately $1.05 and on July 8, 1 euro was worth $1.01. Today, the value of the euro is around 15% lower than at this time last year.
What does this mean for US travelers?
In short: “Historically expensive Europe is now much cheaper to visit,” Matthew Kepnes, an expert traveler who shares money-saving travel tips on his blog Nomadic Matt, told McClatchy News.
Sara Rathner, travel expert at NerdWallet, told CNBC that “it’s kind of like getting a 15% discount. It’s softer on people’s travel budgets.
Mark Zandi, chief economist at Moody’s Analytics, told USA Today that some discounts could be even bigger.
The “stronger dollar” “helps offset the cost of airfare and hotel rooms about 10-20% cheaper,” Zandi said.
Tourists to Europe will notice the strength of the U.S. dollar “especially when it comes to food and drink as well as shopping,” Kepnes said.
For example, last year, if a traveler bought a scarf for 10 euros, that scarf would cost him around $12. Right now, though, this scarf would cost around $10.
Kepnes expects the strong dollar to “create more interest in Europe”, but that there will be no “surge” in travel to Europe anytime soon. He said “more autumn trips to Europe” are likely as people plan ahead.
Future travelers can still take advantage of the low exchange rate by booking ahead and paying now, CNBC reported.
So where to go?
Kepnes’ best advice? “Avoid the big tourist spots. These places are crowded during the summer months, he said.
Instead, Kepnes recommended visiting places “off the beaten path.” These locations, he said, tend to be cheaper upfront, allowing travelers to get an even better deal on top of the strength of the U.S. dollar.
The euro is the official currency of 19 countries, an area known as the eurozone, according to the European Union.
The euro area includes: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.
This story was originally published July 13, 2022 6:59 a.m.