IE 11 is not supported. For an optimal experience visit our site on another browser.

Despite deals in Europe, Americans stay home

U.S. consumers have a firmer grip on their pocketbooks these days, so it's no big surprise that Americans aren't booking major vacations in other countries.
Rome may be beautiful, but travel deals are tough to come by. However, conditions are favorable for an affordable European vacation if you know where, and when, to look.Gregorio Borgia / AP

The euro dipped to a four-year low against the dollar earlier this summer, but not a lot of Americans booked flights and hopped the pond to take advantage of the favorable exchange rate.

In fact, when it came to booking European “dip trips,” there was a lot more talk than action, survey results from a recent Travelocity poll show.

Only two percent of the nearly 2,500 survey respondents said they actually booked a trip based on the strength of the dollar, despite about one-third saying the decline of the euro made a European trip appealing. And of those survey participants who were considering going to Europe, the majority (62 percent) weren’t quite ready to travel, said Travelocity’s Jennifer Gaines. “Most were waiting for an even better exchange rate. Others were wary about the strength of the dollar and wondering if it was going to stick,” she said.

Meanwhile, 28 percent of respondents weren’t even aware that the euro was declining — a notable figure for a survey focusing on currency rates and European travel. Another 17 percent admitted they had no interest in going to Europe at all.

Since June, when Travelocity conducted its survey, the euro has worked its way back to $1.28 — still quite favorable compared to the exchange rate of $1.42 a year ago and $1.49 in August, 2008.

With a national unemployment rate hovering just below 10 percent and personal savings rates near one-year highs, U.S. consumers have a firmer grip on their pocketbooks. It's no big surprise that Americans aren't booking major vacations in other countries.

"Travel, which is seen as a discretionary item, may suffer as a result of the degree of caution and apprehension consumers are expressing," said Lynn Franco, director of the Conference Board Consumer Research Center.

However, while the rock-bottom recession deals of 2009 may be gone, conditions do exist for an affordable European vacation — especially for savvy travel planners who know where, and when, to look.

For one thing, shoulder season — the lull between the high and low points in travel — is nearly upon us. “You are out of the peak travel season, so most things will be cheaper,” said Patrick Evans of STA Travel, a discount travel agency geared toward students. “Some restaurants discount their menus, and you'll often get better service because the hotels and restaurants aren't packed,” he said.

“You’ll see the savings once you get there,” said Orbitz Worldwide spokesperson Brian Hoyt. “In some cities, hotel rates are down two years in a row. In July, you could book a hotel room in Amsterdam at prices 36 percent lower than 2008 rates.”

Summer airfares to Europe have crept back up near 2008 highs. Orbitz reports a 12 percent increase in European fares (although that number factors in eastern European destinations, as well).

“Travelers can expect to pay $1,050 for a round-trip ticket compared to last year’s $828,” Travelocity's Gaines said.

Some industry watchers say the upward trend may break. “Last year, a number of round-trip airfares to Europe dropped by more than 50 percent from August to September,” said Jeff Pecor of Yapta, a flight-price tracking service. “With the economy relatively unchanged compared to last year, one can only assume that we're in for a repeat occurrence.”

Expedia's Adam Anderson said travelers may not see many deals through September, but “October and November may prove to be better as new air capacity is being added to many European destinations.”

European hotels, meanwhile, are throwing in freebies. The dip in the euro and “continued promotions such as free meals have pushed a few shoulder season trips through,” said Margie Jordan of ASAP Travel, a website devoted to discount travel.

In Travelocity’s survey, Italy, France and Great Britain topped the list of European destinations people wanted to visit most — no surprise, as Rome, Paris and London top many travelers’ wish lists — but that's not where the deals are.

“The lowest average airfares right now are to Ireland, Belgium and Spain,” Gaines said. “Hotel rates in Barcelona and Dublin especially have dropped significantly. Barcelona hotels are averaging $198 a night. Compare that with Rome at an average of $277 a night and Paris at an average price of $298 per night.” Travelers who can be flexible about their destination can get great deals, she said.

Last week, the SmarterTravel Editors Picks listed fare promotions on Lufthansa, United and American for fall travel to Europe. Mathias Friess of Webjet, an Australian online travel agency, is finding that the high demand for direct flights means that “carriers are offering one-stop alternatives at heavy discounts. For example: New York to Barcelona, Madrid or Frankfurt, via Dublin, from $229 each way.”

Package prices to European destinations can save money, but there’s no assurance you’re getting the best deal. “You need to do your homework,” Gaines said, “but these days, many online sites let you put together your own packages so it’s easier to price check any offering.”

And travelers need to be aware of the fees that may not show up until it's time to swipe your credit card. “Many airlines have upped checked baggage fees in the past year and added fees for early boarding and advance seat assignment,” noted Trip Advisor’s Allison Danziger, “Travelers should also watch for international taxes tacked onto flights from the U.S. to Europe. And when researching prices, carefully check airline websites and understand the total price before you buy.