For those of you who don’t keep track of how strong (or weak) the U.S. dollar is against the euro (or other world currencies), there’s good news for Americans. The dollar is now under $1.20 to the euro. That’s the strongest the dollar been in more than five years. Some who had been postponing vacations or business trips are booking ticket to the E.U.
This recent strength isn’t a shabby incentive to motivate Americans to take to the skies and head to Europe. There’s no question there’s been a pent-up demand to travel — and why not do so when your money will go a whole lot further?
The favorable exchange rate makes a trip to Europe more manageable — or may just put it back in reach if you’ve been feeling priced out of the market. Bonjour Paris has been saying that for travelers coming to Europe for a short vacation, a few dollars here and there do not make a life-or-death difference. But with the recent dollar vs. euro exchange shift it’s a real difference and it’s your money. Here are a few numbers.
A little over two years ago, a euro cost $1.60. Today, it costs a little less than $1.20. That’s like getting a 25-percent raise or, to make it very practical, €100 spent in restaurants costs you about $120 (today’s exchange rate), not $160. Does that sound real enough?
Apparently it does to quite a few people. We conducted a very quick poll on our Bonjour Paris Facebook Page and queried our readers about their plans. Some people commented that, because of the current exchange rate, they’re booking tickets to France since it’s simply too good to pass up. Others posted they’d planned their trips when the dollar was at $1.40 to the euro and would go anyway, stating that the elevated airfares are the real sticking point.
Those truly deep-discounted fare wars (under $300 round-trip) seem to be a thing of the past. Even though fuel costs are lower, the airlines haven’t felt so inclined to drop the hefty fuel surcharges. Fares may look good until all of the add-ons are factored into the price and the list appears to be expanding each week.
Hotels, restaurants and other businesses in the service industry that target an American clientele are seeing a definite increase in business. Some restaurant owners are suggesting that travelers should reserve in advance. That’s a change from last year when people were eating out less (there’s nothing like a picnic) because of the U.S. economy. And who wanted to take out a bank loan to settle up at the end of a meal?
For American expats who live in the E.U. and whose income is dollar denominated, we feel as if we’ve come into a small inheritance from a relative who worried about whether or not we’d be able to pay our bills. Yes, we’ve received a slight reprieve from what’s felt like poverty, especially for those of us who have lived in France since its currency was denominated in francs. It’s been a financial roller coaster, whether or not we were prepared for the ride.
Not being an economist, I don’t pretend to know whether or not the euro has been overvalued — although given the way all the members of the currency union have been fibbing about their deficits, there’s some good evidence that it has been. If that is the case, then, on the one hand, it’s overdue and, on the other… well, as Harry Truman said, it would be nice to find a one-handed economist. But the facts of the moment are right in front of us. The euro is down and likely not to rise very far any time soon.
So, here’s a question for everyone. Is the lower value of the euro having any effect on your plans for travel? If so, how? Let us know. We’re always glad to hear from you. And, please come to France!
Karen Fawcett is president of Bonjour Paris
Karen Fawcett loves to travel anywhere. Karen was a founder & president BonjourParis.com while living in Paris for more than 25 years. She has traveled across Europe and the rest of the world. She is now based in Washington, DC.
