International travel is becoming a major headache due to congestion at airports across the globe.
However, if you are able to travel from the U.S.A to Europe, all things, from croissants to taxi rides, to luxury goods, will be more affordable than ever thanks to the strong U.S. Dollar.
Experts don't recommend booking a trip in Europe due to overcrowding and unreliability of flights, as well as high hotel and airline costs.
Willis Orlando, Scott's Cheap Flights' travel specialist, said, "If you're not already on vacation, I wouldn’t say go right now just because the exchange rates are so good." There are many other factors that can affect hotel prices, such as large crowds.
If you already have a trip planned or are in Italy, you can expect great deals at restaurants.
For the first time in twenty years, the U.S. dollar has almost been equal to the euro. The euro currently has a value of $1.02, compared to $1.18 last year. The Federal Reserve raises interest rates faster than the European Central Bank, giving the greenback more weight. Investors are increasingly turning to safe-haven assets such as the U.S. Dollar because of fears about a recession.
"The euro is now at its lowest level in a long while." American citizens who travel to Europe at the current exchange rate will see a significant increase in their real income," Angel Talavera, Oxford Economics' head of European economics, said.
According to Indagare, luxury travel company Indagare data shows that hotel and flight prices are increasing anywhere from 20% to 60% in certain markets.
However, Americans will see savings once they reach the French Riviera.
The dollar is stronger and can go further on some things. Indagare founder Melissa Biggs Bradley stated that the opposite effect of this impact is that hotels and flights are more expensive than they were one year ago.
Bradley said that restaurants, coffee shops, taxi cabs, and buying a cup of tea are the best places to get the most bang for your buck. Also, luxury goods are on sale right now. It will be noticeable cheaper for people who love international brands of cosmetics and clothing. So stock up on the foreign brands that you love.
A plate of tortellini from Italy, for example, would cost $18.36 today compared to $21.24 in Italy last year.
Tablet Hotels, a boutique-hotel booking platform, has been closely monitoring the rise in accommodation rates at more than 6,000 properties around the world.
Tablet makes about half its bookings for hotels with an average daily rate (ADR), over $300. According to Lucy Lieberman, CEO of Tablet Hotels, this figure is closer than 65%.
According to Tablet's data, the ADR in Italy was $426 in 2019. It's now $491, an increase of 15%.
Americans who visit Europe and pay in euros for their purchases are eligible to receive a 10% discount, as the euro-todollar exchange rate was $1.13 at the start of the year.
Lieberman explained to CBS MoneyWatch that even though the average price has risen 15%, the exchange rate means that you are paying 10% less.
Prepaying for your bookings can help you lock in a favorable rate. The dollar will remain strong for many months.
"There's no reason to believe that this trend will reverse, even if the European Central Bank tightens. Cailin Birch of the Economist Intelligence Unit, stated that we expect a strong dollar in the coming quarters.
To maximize savings, travellers should use an ATM to withdraw local currency in Europe. This is better than a conversion teller who charges a commission.
If you have the option of paying in dollars or in local currency when using your credit card, always pay in local currency.
"If you pay in local currency, it is converted at the time of the transaction without any commission. Bradley explained that if you pay in dollars, the vendor may charge a conversion fee or change the rate later.
The dollar's near parity with the euro has another benefit: American tourists are less uncertain about the actual cost of goods and services in dollars.
It makes life easier when the price is in euros but the same in dollars. Orlando stated that there is no need for conversion. It creates clarity. It's great for U.S. travelers right now, which is great because there are many of us there.