Image: Oak casks with Port wine at the Wunderlich Wine-cellars in Villany, Hungary
Ferenc Kalmandy  /  EPA file
Oak casks are filled with Port wine at the Wunderlich Wine cellars in Villany, Hungary. In the prime red wine region of Villany you can get small-town prices—pension suites with a kitchen rent for $40 to $60 a night (corkscrew and wine glasses included, of course).
By Tim Leffel Travel columnist
updated 10/10/2007 4:08:07 PM ET 2007-10-10T20:08:07

"Dollar hits record low against euro," says the newspaper headline — again. From a point of parity in 2002, the U.S. dollar has slipped continually in relation to the European currency, sinking to 1.20, then 1.30 and then dropping to 1.42 at the end of September. It now takes $1.42 to buy one euro, making everything 42 percent more expensive than it was a few years ago.

What this means is that an already-expensive continent is now even pricier. It's not uncommon in Western European capitals these days to find $500 hotel rooms, $100 cab rides and $40 plates of pasta.

There are several ways to ease the pain, however, if you can't put off that trip across the Atlantic. Avoiding summer helps a lot, especially in terms of hotel rates and airfare. Heading east or south can make a big difference too: Spain, Portugal and most of the former Iron Curtain countries are significantly cheaper than perennial favorites Italy, France and England.

Head to the countryside
The best thing to do is to head out of town. Just as a vacation in New York City will cost you far more than a vacation in the Catskills, Europe's capital cities will drain your budget far more quickly than the burgs and hamlets of the countryside. Big-city real estate values, taxes, and labor costs are all higher than in the country, and this means higher end costs for everything. Once you venture to more rural areas, your costs will go down.

I just got back from two weeks in Hungary and the Czech Republic. These are relatively inexpensive countries, but prices in Prague and Budapest are sometimes shockingly high. Though neither city uses the euro as its currency yet, rooms in international chain hotels in both cities are routinely listed at 250 euros or more for a standard double, which will tap your wallet or credit card for at least $355 — too much, if you ask me.

The scary thing is, plenty of people are paying those prices. Some 90 percent of visitors to the Czech Republic never sleep outside of Prague, so demand is high. Supply is tight too, now that an increasing number of budget flights among European cities are bringing more European visitors into Prague and Budapest. It doesn't take an economist to see the result: The city hotels can pretty much charge as they please.

Small-town prices
Be part of the 10 percent that ventures outside of the capitals, however, and it's a different story. Granted, your hotel in a small town may be more like a family-run B & B, but if you want to see the real Europe, this is a better bet anyway. In Mikulov, a historic town in the Moravia region of the Czech Republic, I stayed at the best place in town, Hotel Templ. Rooms in this lovingly restored building range from $68 to $125 a night, with a nice breakfast buffet included. In the Lake Balaton region of Hungary, rates for a simple inn start at only $30 a night for a double and the dozens of larger hotels mostly go for $50 to $150 per night. In the prime red wine region of Villany, pension suites with a kitchen rent for $40 to $60 a night (corkscrew and wine glasses included, of course).

It's not just the room rates that become more affordable in the rural areas. Restaurant meals are often half what you just paid in the big city. That $2 draft beer in the tourist district of Prague will be less than a buck elsewhere. The $8 bowl of goulash in Budapest drops to $4 outside the capital, and bottles of wine list at prices that encourage wide sampling.

Prices will be higher across the board in England, Italy or Holland, of course, but the same principle applies. Once outside the urban areas, you'll find lower prices for everything from bike rentals to local guides.

One caveat: All bets are off in any beach resort town marketed heavily to tourists. Less populated regions of France and Spain may offer deals, but when you get to the sea, expect to pay inflated prices for everything. As in much of the world, business owners in these parts use the laws of supply and demand to their best advantage and there are only so many choice beach spots where you can gaze out at the sea.

So, if you are contemplating a trip to Europe but are worried about the cost, head inland to the countryside and find the charm of a slower paced, better priced, old Europe. You'll go through fewer battered Ben Franklins and probably have a more interesting vacation to boot.

Tim Leffel is author of the books "Make Your Travel Dollars Worth a Fortune" and "The World's Cheapest Destinations". He also edits the award-winning narrative Web 'zine Perceptive Travel.

Photos: A European tour

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  1. Venice, Italy

    Gondolas line the bank near Venice's grand canal with the San Giorgio Maggiore church in the background. (Peter Deilmann Cruises via AP) Back to slideshow navigation
  2. Rome, Italy

    The Colosseum is one of the best-known attractions in all of Italy, and is the largest elliptical amphitheater built in the Roman empire. (Tiziana Fabi / AFP - Getty Images) Back to slideshow navigation
  3. London, England

    The Houses of Parliament and Big Ben clock tower, located along the River Thames, are seen at dusk from Westminster Bridge. (George Rose / Getty Images) Back to slideshow navigation
  4. Berlin, Germany

    Tourists take pictures of themselves at the Holocaust Memorial in Berlin. The memorial, designed by U.S. architect Peter Eisenman and inaugurated in May 2005, is made up of more than 2,700 concrete steles that form a curved landscape in the heart of Germany's capital. (Barbara Sax / AFP - Getty Images) Back to slideshow navigation
  5. Granada, Spain

    The Alhambra palace in Granada, although one of 21 finalists, missed out on being named one of the new seven wonders of the world. (Jose Luis Roca / AFP - Getty Images) Back to slideshow navigation
  6. Paris, France

    This bird's-eye view of Paris at dusk, with the Eiffel Tower and L'Hotel des Invalides prominent, show why the capital's nickname is the "City of Light." (Mike Hewitt / Getty Images) Back to slideshow navigation
  7. Lindos, Greece

    The ancient town of Lindos is famous for its Acropolis, which stands on a 380-foot-high hill overlooking Lindos and the Aegean Sea and is listed as a UNESCO World Heritage Site. (Eyeswideopen / Getty Images) Back to slideshow navigation
  8. Dublin, Ireland

    People walk past The Temple Bar, which should not be confused with its neighborhood, also called Temple Bar, in central Dublin. Ireland's capital has been voted one of the top 25 cities of the world to live in. (Chris Jackson / Getty Images) Back to slideshow navigation
  9. Lisbon, Portugal

    Belém Tower was built in the early 16th century as a ceremonial gateway to the city, and to serve as a defense at the mouth of the Tagus River. It is listed as a UNESCO World Heritage Site. (Sebastiano Scattolin / Corbis) Back to slideshow navigation
  10. Barcelona, Spain

    Columns and arches of the Sagrada Familia rise high in this Roman Catholic church, which has been under construction since 1882 and remains incomplete. (Christophe Simon / AFP - Getty Images) Back to slideshow navigation
  11. Florence, Italy

    A woman looks over Florence from the dome of Santa Maria del Fiore. Construction on the city's cathedral church began in 1296 and finished in 1462. (Guido Cozzi / Corbis) Back to slideshow navigation
  12. County Mayo, Ireland

    Ashford Castle, which dates back to the 13th century and sits on 350 acres of manicured gardens and land, now ranks among the finest hotels in Ireland. About a two-hour drive from Dublin, the castle has played host to myriad high-profile events, including actor Pierce Brosnan's wedding. (Tourism Ireland via AP) Back to slideshow navigation
  13. Kaag, Netherlands

    A cyclist pedals along rows of tulips near the village of Kaag, outside of Amsterdam, Netherlands. The Dutch often use cycling to get around, and Amsterdam is considered one of the most bike-friendly large cities in the world. (Peter Dejong / AP) Back to slideshow navigation
  14. Amsterdam, Netherlands

    A tourist smokes at a coffeeshop "de Dampkring," or "Atmosphere," where a part of the "Ocean's Twelve" movie was filmed, in the center of Amsterdam, Netherlands. The city is famous for its nightlife, cultural activities and red-light district. (Peter Dejong / AP) Back to slideshow navigation
  15. Stockholm, Sweden

    Boats line up on the shoreline in Stockholm, the capital and largest city in Sweden. The city is built on 14 islands connected by 57 bridges. (Olivier Morin / AFP - Getty Images) Back to slideshow navigation
  16. Krakow, Poland

    The Church of St. Mary of the Assumption in Krakow, Poland, is one of the most well-known tourist spots in the city and noted for its gothic, medieval architecture. However, most people come to Krakow because of its proximity to Auschwitz, the largest of the Nazi's concentration camps, which is now a memorial to the victims of the Holocaust. (Jon Hicks / Corbis) Back to slideshow navigation
  17. Nice, France

    Hundreds of people enjoy sunbathing on the beach in Nice on the French Riviera. (Valery Hache / AFP - Getty Images) Back to slideshow navigation
  18. Brussels, Belgium

    The Grand Place in the heart of Old Town in Brussels, Belguim, is marked by many 17th-century buildings and flower markets. (Jean-Pierre Lescourret / Corbis) Back to slideshow navigation
  19. Greek islands

    Oia, on the island of Santorini, Greece, is on a clifftop village filled with white structures and gorgeous sunsets. Santorini offers seaside tavernas, cliffside paths, black volcanic rocks and of course, sunshine and the Aegean Sea. (Saundra Virtanen / AP) Back to slideshow navigation
  20. Pamplona, Spain

    Revelers hold up their red scarves during the start of the San Fermin Festival in Pamplona, Spain. The annual festival is best known for its daily running of the bulls. (Susana Vera / Reuters) Back to slideshow navigation
  21. Prague, Czech Republic

    The buildings in Prague, the capital of the Czech Republic, are constructed in many architectural styles from Romanesque to gothic to art nouveau and modern. (Michal Cizek / AFP - Getty Images) Back to slideshow navigation
  22. Reykjavik, Iceland

    Tourists stand in the Blue Lagoon outside Reykjavik, Iceland. The Blue Lagoon's waters come from natural hot water springs flowing through rocks of lava. Many also believe the mineral-rich waters may have health benefits. (Olivier Morin / AFP - Getty Images) Back to slideshow navigation
  23. St. Petersburg, Russia

    The Cathedral of Saints Peter and Paul is seen on the bank of the Neva River in St. Petersburg, Russia. (Dmitry Lovetsky / AP) Back to slideshow navigation
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