Image: People dining next to beach.
Lionel Cironneau  /  AP
People take lunch at the Blue Beach restaurant in Nice, France.
updated 6/16/2006 12:52:42 PM ET 2006-06-16T16:52:42

Carol Henning and her 18-year-old niece will be touring France by bus this July, seeing the D-Day beaches of Normandy, basking in the sun on the Riviera, and taking in the medieval sites of Avignon.

The 14-day tour costs $1,380 per person -- less than $100 a day -- including hotel accommodations, breakfasts and five dinners. "I'm not sure I could get cheaper for the number of days that we're there," said Henning, 43, who purchased airfare separately.

The rise of the euro against the U.S. dollar hasn't stopped Americans from taking their dream vacations to Europe this summer, but it has led many to plan trips carefully so they can stretch their budgets once they get there.

That puts tour operators in a good position. Companies offering packaged hotel and airfare deals, sightseeing and transportation tours say business is up. Tours offer cost-effective vacations by setting prices in advance and negotiating rates that individual travelers may not be able to get.

Marc Kazlauskas, president of Insight Vacations, based in Rye, N.Y., said his tour company is having the best year in its 28-year history, with revenue and volume of travelers up more than 30 percent from last year.

Insight charges an average of $175 per day for its European tours, including hotels, tour directors, most meals, most sightseeing, taxes, transportation, and gratuities to hotel bellmen, he said. "It's a pretty good rate," he said. "Especially these days."

The euro hit a one-year high of $1.2979 against the dollar June 5 and has fallen only slightly since. At that exchange rate, the smallest latte at Starbucks costs about $4.55 in Paris, compared to $3.36 in New York City.

The currency is used in 12 nations in the European Union: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland.

But tour companies say exchange rates don't negatively affect their businesses because they negotiate prices well in advance. "There is no currency issue. When you buy the tour it's in U.S. dollars, so it's set, it's done, it doesn't change," said Kazlauskas.

Hans Sohlstrom, president of Grand European Tours, based in Lake Oswego, Ore., said he has also seen business rise more than 30 percent this year.

"Of course, prices have gone up," he said. "I think the vendors in Europe, the hotels, the coach companies and so forth, they also understand that they've got to trim whatever they can trim to give (travelers) a better rate so we can bring more people to them."

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'Less intimidated by exchange rates'
There are still some tour options available for this summer, said Robert Whitley, president of the United States Tour Operators Association, a trade group. Travelers who want to book last-minute tours can speak with a travel agent or find tour companies on the Internet.

Sandra Lovick, a travel agent and owner of five Carlson Wagonlit travel stores in the Twin Cities, said travelers who go to Europe without a tour group can still find ways to save this summer. "A major city is a major city," she said. "You're going to pay $250 to $300 for a hotel in New York, and that's what you are going to pay in Paris."

Lovick recommended visiting less-traveled destinations or staying in small towns. She said she just returned from a trip that included Croatia, which accepts the euro but doesn't use it as its main form of currency. She said she found great values on copper jewelry and silk scarves at markets in Mostar.

Independent travelers can also cut spending by prepaying for accommodations, staying in less expensive hotels, or buying food from markets instead of eating in restaurants every night.

Andrew Olson, 30, and his fiancee, 31-year-old Tanya Pierce, both of St. Paul, plan to rent a car and spend much of their honeymoon seeing the countryside of west-central Europe. They'll explore German vineyards, French chateaux and historic battlegrounds.

Olson said they're not worried about the exchange rate, but they will probably stay in lesser hotels and make fewer visits to high-end restaurants.

"Once we get there, we're not going to be splurging as much as we normally would have." Olson said. "If it was something other than the honeymoon ... we probably would've definitely considered" the exchange rate.

Nora Brossard, spokeswoman for the European Travel Commission, said Americans are becoming more savvy about traveling, and exchange rates haven't dampened travel this year.

In fact, the commission, a marketing organization that includes tourism officials from more than 30 countries, is predicting the number of American travelers to Europe this year will break the record of 13.12 million set in 2000.

"People postponed travel too much since the downturn of 2001," she said, adding that now people are realizing they missed traveling, and they are "less intimidated by exchange rates than they used to be."

She said tours in Europe are highly recommended because the trip is paid for in advance. In addition, she said, cruises in Europe are booming. "It's more expensive just to wander freely," she said. "If you want to go with kind of the footloose itinerary, you will probably then find yourself wasting a lot of time looking for hotels, ways to save."

And when it comes to the exchange rate: "It's something that you can't control. You can only control how you spend your money," she said.

Henning has been on tours before and said that for her, they are a good, hassle-free way to travel -- with hotel accommodations and some sightseeing opportunities already set up.

"I don't think twice about the euro," she said. "I love to travel so for me, it doesn't impact me. If it's something I want, I'm going to buy it."

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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