Over the past year, you’ve gotten richer without even knowing it. In fact, your wealth has increased by 30%. We’re talking, of course, about your net wealth in euros. I know these big gains don’t help much when it comes to paying the cable bill or buying a car. But you still can, and should, take full advantage of this windfall.
The dollars in your wallet are worth far more today than they were a year or two ago. Why, you ask? Well, the U.S. economy, for all its problems, is kicking ass when compared with the stagnant condition of most others. This is creating havoc in international financial markets— but for you, it’s creating an opportunity to utter one of the best lines a man can say to a woman: “Honey, why don’t we fly off to Europe?”
Whether you head to Barcelona or Berlin, Crete or County Cork, as an American you suddenly have the upper hand, and that translates to a lot more vacation. Exhibit A: Had you sprung for a junior suite at the Majestic Hotel & Spa in Barcelona last year, it would have set you back $715 per night. This year the same room costs $588, or you can get a smaller room and pay half that. At the nearby Prada flagship, a bag for your lady that would have run you $1,000 last year now costs $700. Not only do the words “spa” and “shopping” have special resonance with the females of our species, the building that houses the Majestic is 100 years old and contains more than 1,000 works of art. You get the point.
And it’s not just Europe. Americans can head to Argentina and get a double bonus: Not only has the dollar been rising in general, but the peso has also tanked for its own special reasons. The average rate for a room at the imposing Park Hyatt Mendoza was $177 in 2012, but by last year had fallen to $120. More reasons to head (way) south: Steak is practically a religion, the malbec is getting better just as fast as it’s getting cheaper, and it’s cool there in June. As the Los Angeles Times put it, “For Americans, the planet is on sale.”
Here’s how to make the best use of your newfound foreign-currency riches.
Think Portugal, not Paris
Your dollar will go furthest if you avoid Italy, France, and England, says David Kolner, a senior vice president at luxury travel network Virtuoso. Kolner is particularly enamored of Berlin right now, where he says the five-star hotel Adlon is charging half what it would cost to get comparable accommodations in Paris. He also recommends Greece. “The country is so eager for tourism that you get a level of service you’d never see in a thousand years in the United States,” he says.
Feeling adventurous? Thanks to the plummeting price of oil and Putin’s plundering of Ukraine, the Russian economy is taking it on the chin. The ruble has fallen 60% against the dollar in just the past year, making Russia a bargain for adventurous Americans. Kolner says one of the best ways to see the country is by signing up for a river cruise, a suddenly hot travel category that lets you ride in comfort while avoiding the floating-mall horrors of huge cruise ships. Some European and eastern European river cruises have bikes on board so you can ride alongside the boat when you want to get some exercise.
But you don’t have to get exotic to save. According to Virtuoso, the average daily rate for luxury hotels has fallen in almost every country, from an average of $866 in 2014 to $673 this year.
Wait for the school bell
“September is the magic month,” says CBS News travel editor Peter Greenberg, who recommends you wait until the end of summer, when most of the other tourists have gone home. Hotels in the south of France, for instance, will face 60% occupancy, he says, which means lower rates and room to negotiate.
He recommends calling the hotel and asking for the cheapest room—“How much time do you spend in the hotel?” he asks rhetorically—and writing down
the name of the person you’ve spoken to. Then do what your mother told you to do after every holiday: Write a quick thank-you note. “No one does that,” you say? Exactly, that’s why you should. When you arrive in your half-empty hotel, they’ll know who you are. Expect good service and possibly a free upgrade. If you don’t have kids, take full advantage of that freedom.
The real savings
As great as the travel deals are for Americans right now, let’s face it, hotel owners are not idiots. They know the dollar is strong, and are doing what they can to nudge prices higher for all of us who pay in greenbacks. So as good as those deals are, the biggest savings right now are on all the things you pay for at places that don’t cater exclusively to tourists, from restaurants to shoe stores to ski resorts.
Greenberg is a currency black belt, having built his entire house in Thailand, then crated and shipped it to Los Angeles. He says he saved $250,000. You may not go that far, but consider following his advice and doing your Christmas shopping abroad. This year he’s got his eye on Buenos Aires, which is known for its leather goods.
And be selfish, too. Remember, Adidas and Puma are German, so, with the economy, new sneakers will cost one-third less than they did last year. If you’re a skier you may have noticed how the Europeans always have cooler gear—this is your chance to load up on their stuff at a discount.
Make the skies friendlier
Perhaps no industry has come out of the financial crisis healthier than the airlines. They did this of course by making passengers miserable, cramming more of them into each plane, and making them pay for everything from snacks to bag checks to legroom. The newest trick? Charging Americans more to head east than they charge Europeans to head west. In fact, it cost almost $900 more to fly round-trip from New York to London than from London to New York, according to an analysis commissioned by The Wall Street Journal.
It’s not easy to avoid this gouging, but one trick is to book a one-way ticket to Europe with frequent-flier miles, then pay for a one-way ticket back. Compare that with the best round-trip price you can get. Kolner says Virtuoso has access to special fares not available to the public, so you might save by using a service such as his. Otherwise, he says, book as far in advance as you possibly can—the days of cheap last-minute fares are quickly fading.
Greenberg suggests trying sites such as mobissimo.com, which “searches foreign sites you’ve never heard of" for the best fare, and try momondo.com, which is based in Copenhagen. And even if you can’t get a great deal on plane tickets, so what? They may be the only thing you don’t get at a discount.
Jack Otter is the author of Worth It...Not Worth It? Simle & Profitable Answers to Life's Tough Financial Questions.