Video: Falling dollar

By Correspondent
NBC News
updated 12/13/2004 10:20:53 AM ET 2004-12-13T15:20:53

On a crisp and unexpectedly clear London morning, Marian Aguilar took in the British capital from atop a double-decker bus. But as the main tourist and shopping hotspots passed by, Aguilar stayed put.

"I’m just seeing the sights from here instead of paying to go to each place," the Florida native said.

Across Europe, the weak dollar is hitting Americans where it counts — in the wallet — at a time when thousands usually take advantage of December travel deals. Both the British pound and the euro are stronger against the dollar than they have ever been, and museums, restaurants and traditional holiday shopping are practically off limits for American visitors.

Barbara Alderman, of Hollywood, Fla., also took her family on the open top tour bus to save money. "When we went past all those shops on the tour, my husband said, ‘Don’t even think about stopping there!’"

Look but don’t buy
There’s a lot of window-shopping going on across the European continent this holiday season.

"I mean, I can't buy anything other than necessities," complained Megan Sprague, a Boston native who took a last-minute trip to Rome for the holidays. "I'm doing the bare necessities: food, train tickets, the bus. I can't buy anything. I don't even look at the vendors."

Sprague said she would have been better off going to Mexico. "The dollar goes a little further over there."

The number of American visitors to Europe has rebounded healthily since the 9/11 terror attacks, but the weak dollar is changing visitors’ habits and starting to keep many away, industry experts say.

"They’re spending less money. They’re going to perhaps fewer attractions and going shopping less," said Frances Tuke of the Association of British Travel Agents.

Rising cost of holidays
One year ago, one euro was about $1.18. Now a euro will cost American visitors more than a $1.30. When the euro was introduced three years ago, the continent was a bargain for Americans, with one euro costing $.90.

In Britain, which still uses the pound, the currency has gone from $1.70 to over a $1.90 in the last year.

Major Market Indices

The reality can be even harsher on the ground. With commissions, some exchange booths are selling one pound for $2.00. The euro also trades on the street for $1.40.

A European holiday can cost up to 30 percent more than last year.

Bank accounts hit hard
Frank Lepara of Detroit, Mich., has watched the exchange rate eat away at his Roman holiday.

"The dollar has changed quite a bit since I've been here," he said. "My bank account is getting smaller and smaller the longer I stay here. Hopefully it will last me until the end of my trip in two weeks."

"It's hard because I don't really spend a lot of money at home," said Caroline Wheatley of St. Louis, Mo., a student passing through London on her way home from a trip to India. "When I think about it in U.S. dollars, I wouldn't pay that much. It's twice as much."

"Every time you turn around, it’s another 100 pounds out of the ATM," said Alan Willins from Martha’s Vineyard, Mass.

No bargain meals
Travelers who try to stick to a budget still find that even a "cheap" meal can break the bank.

"I'm embarrassed to say we had lunch at McDonalds," said Barbara Alderman. "But we didn't want to spend too much money going to a proper restaurant. Even going to McDonalds, I could believe how much a Happy Meal was when I converted it. I tried not to think about it.

If she did, Alderman would find that same Happy Meal in London is almost $4.00, nearly double the price at home.

While visitors like Stefanie Beyanami, in London for a week break from Miami, can't resist having a look around, that’s as far as they go.

"I’ve been window shopping," Beyanami said.

That’s a trend seen by shops and hospitality industry workers from the Spanish Steps to the Champs Elysees.

One store manager in Paris, who wished to remain anonymous, said he estimated there were 50 percent fewer American clients than last year.

"Just going to have to wait a little bit and see what happens. It's really, really tough these days," he said.

NBC’s Preston Mendenhall is on assignment in London. Ali Arouzi in London and Claudio Lavanga in Rome contributed to this report.

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