The Strong U.S. Dollar Has Americans Flocking To Europe This Fall – Forbes

Thanks to the strong dollar, American travelers are finding Europe a bargain right now.
It made headlines in July when the U.S. dollar reached parity with the euro for the first time in two decades. Since then, the dollar has stayed strong, sending bargain-hunting Americans flocking overseas.
One dollar currently buys 1.03 euros, about 20% more than it did a year ago. And compared to this time last year, the dollar is 18% stronger against the British pound.
“Customers feel Europe is the best value it has been in over 20 years. We have seen spikes in travel to the U.K. and Europe over the last two months,” says James Ferrara, president of InteleTravel, an online travel agency with a network of over 70,000 independent travel advisors across the U.S., U.K., Mexico, and Caribbean. “We can distinguish that from the upward trend of this entire year because destinations like London, Ireland, Italy, and France are getting far more than their usual share. In the Mediterranean, you can really see the difference, bucking what would normally be the shoulder season of declining interest in September and October.”
Thanks to the favorable exchange rate, luxury travelers are traveling during what is normally an off-peak time. “Our top 10 is predominantly ruled by Europe throughout the summer,” says Misty Belles, vice president of global public relations for Virtuoso, whose 20,000 travel advisors make up the world’s largest luxury travel network. “But it’s still like that moving into fall and the holidays, which is unique, because you usually don’t get as much Europe for the winter season.”
Keep in mind that inflation is high in the U.S. but also in Europe. “So the strong dollar may not necessarily reflect in the hotel rates, but it certainly does in dining out and shopping,” says Belles, who is looking forward to a trip overseas next week. “This would be the first time I’ve been excited to shop in London in years.”
The pricing for many travel arrangements – flights, hotel rooms, cruise cabins — is dollar-based or negotiated and set by operators a year or more in advance, points out Ferrara. “The savings is in the ancillary spending like ground transportation and sightseeing tours,” he says. “The big win is in shopping and dining where conversion rates can mean savings in the hundreds and thousands. Meals in London feel like 50% of New York costs. The same with buying designer clothes or even having them made.”
“That’s where the value really comes into play; you can do more while you’re in the destination,” says Belles. “Travelers are doing things that they’ve always wanted to do that they had either put off or thought, no, it’s too expensive. There’s the extra enticement of the fact that it’s more affordable just because the dollar stronger.”
Currency fluctuations are hard to predict, which is why some of Virtuoso’s luxury clients are pre-paying their future travel to Europe to lock in prices for next spring and summer, says Belles, “hedging that the euro and the pound might rebound.”
It’s not always possible to prepay far in advance for every element of a trip, since airfares usually post about six months or eight months out. But hotels are another story, says Belles. “If you find a hotel that has that prepaid rate option into 2023, now’s a great time to take advantage of that.”
Once on the ground in your destination, it’s smart to pay for expenses — shopping, meals, event tickets, entry fees to attractions — with a credit card that does not charge foreign transaction fees, which can save 3% on every purchase you make abroad.
Planning a shopping spree? You can typically claim a refund at the airport for the VAT sales tax you paid at stores in Europe — which generally ranges from 17% to 27%, depending on the country. Do not forget to ask merchants for the relevant paperwork and save your receipts. London shoppers are out of luck, though, as the U.K. ended its VAT refund in 2021.
Even amid worldwide inflation, many travelers can’t resist a perceived bargain. “You’ve got Americans and others who are coming in and spending money that they might not have spent otherwise,” says Belles. “They would have stayed at the hotel, they might have gone to a few nice restaurants. But now they’re going to be spending more on shopping and more on food and beverage and things like that.”
“It’s a splurge mentality,” says Ferrara. “Travelers are planning to spend more, then actually spending more. And yet they still have the feeling they have extra dollars left in their pockets to justify higher airfares or other inflated necessities.”


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