Image: London
Justin Horrocks  /  iStockphoto.com
As expensive as the Eurozone has become for Americans, it is rivaled in cost by England and its pound sterling, which like the euro has steadily increased in value against the dollar over the last several years.
By
updated 6/13/2008 12:22:10 PM ET 2008-06-13T16:22:10

If ever there was a symbolic sign of the times for American travelers, it was the cardboard notice that appeared this April on the front door of Harry's Bar in Venice, Italy.

“In an effort to make the American victims of subprime loans happier,” declared the sign, “Harry's Bar of Venice has decided to give them a special 20 percent discount on all items on the menu."

Harry’s Bar, a Venice institution once frequented by Ernest Hemingway and other members of the Lost Generation who came to Europe between the wars to take advantage of the dominant dollar, was now offering tourist food-stamps to Americans.

The sign on Harry’s door may have been cheeky, but the shift in the global balance of spending power it reflected is dead serious for anyone traveling on greenbacks. Perhaps the most dramatic sign of this shift came on the day last November when the Canadian dollar — long the butt of snide American jokes — surpassed the U.S. dollar in value for the first time. As with more distant destinations, the result has been fewer Americans going north to what were once reliably cheap and nearby vacation destinations like Montreal.

“Canadians are traveling south and Americans are staying home,” says Michelle Colligan, of Montreal’s Loews Hotel Vogue. “Montreal’s average daily room rates have dropped 10 percent in Canadian dollars since 2000, but increased 20 percent in U.S. dollars. This has not boded well for hotels like ours.”

It wasn’t that long ago that Americans bestrode the globe with the world’s strongest currency in their pockets. In 2000, the euro was still just an accounting currency (the bills and coins were issued in 2002) and the economies of Southeast Asia and Russia were just beginning to emerge from the global financial crises of 1998. Since then, many of the world’s economies have strengthened. Prices have increased. The dollar, meanwhile, has collapsed. For globetrotting upscale travelers, the result is a new and completely different travel landscape.

Take Russia. Not only has the ruble bounced back strong from the 1998 crisis, but its luxury sector has exploded in recent years. These facts have combined to make the city all but unrecognizable to the luxe traveler who last visited the city in 2000.

“Back in 2000, the best rooms in the city were at the Baltschug Kempinski Hotel, which cost about $800 a night,” says Sergey Logvinov, a hospitality consultant in Moscow. “Today you can spend $18,000 for a night in the best suite at the Ritz-Carlton. Prices have gone way up on the high end, and the weak dollar makes Moscow even more expensive for American travelers. We’re seeing less of them.”

The same situation can be found a few borders to the west, in the junior members of the European Union. The beautiful city of Prague, long considered one of the world’s best bargains for American travelers, has for them become almost as expensive as its neighbors Germany and Austria.

“The rising cost of living, the strength of the Czech crown and the weakening of the U.S. dollar have made the best Prague has to offer more expensive for Americans by as much as 70 or 80 percent in the last few years,” says Todd Benson, CEO of Prague.tv, an English-language real estate and travel site.

“Today, an evening of fine dining along the Vlata river will set you back around 4,000 crowns ($250); eight years ago it was less than half that, at most.” Benson also notes that a high-end apartment now goes for around 12 million crowns ($750,000), compared to five million in 2000. Prague’s posh shopping boulevard, Parizska, is now one of the most expensive addresses in all of Europe.

Image: New York City
Dennis Morris  /  iStockphoto.com
The weak dollar has had a surprise effect on hotel prices even here at home. From Manhattan to Vegas to Hawaii, the weak dollar has drawn increased numbers of European vacationers to America and kept more American vacationers inside U.S. borders. Together, this has decreased room availability and increased average rates.
But at least the Czechs aren’t using euros quite yet. Wherever that currency is used, American travelers are hurt the most. When the euro was introduced as the continent's common currency in 2002, a dollar bought about 1.10 euros. Today it doesn’t even buy 65 euro cents. Across the channel in England, a buck will get you half a pound sterling, or 50 pence.

Then there’s Asia, where the prices of a decade ago seem like a sweet, distant dream. As a travel writer for the International Herald Tribune phrased it in a 1998 story, Asia in the wake of that year’s financial crisis was a “traveler's fairy tale.” Round-trip tickets from Frankfurt to Singapore sank to less than $700. Executive suites in major Asian capitals went for as little as $125 a night, with extras. Travelers swept in to buy everything from designer jeans to vacation homes. And it wasn’t just Thailand that was brought down a notch. The regional effect was so great that Tokyo dropped from 15th to 31st most expensive city in the world.

Today, the economies of Asia are again surging, with prices either back to where they were pre-crisis, or beyond. In Thailand, ground zero of the “Asian flu,” property prices are up by more than 50 percent compared to a decade ago, according to Jones Lang LaSalle, a global real estate firm. And don’t expect any special deals on rooms at the Four Seasons in Bangkok, which now start at 10,000 baht. For Americans, that’s $254. In euros, it’s a more comely number — 163.

Just how much more expensive is it around the world these days traveling on greenbacks? We checked out prices around the globe and compared them to the halcyon days of 2000.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments