After three years of passing on that summer holiday in Europe, many travelers are itching to get back on the Continent, but scratching that itch is a pricey proposition, thanks to the weak U.S. dollar. So, instead of breaking the bank to go east, savvy travelers should look south to the Caribbean for the best deals and values.
Over the last two years, the common European currency, the euro, has been steadily climbing against the U.S. dollar, making it harder and harder for American tourists to get a great value in Europe. But with the economy picking up steam, demand for Europe is on the rise, especially now that terror fears have eased somewhat. As a result, deals are harder to find, while everyday expenses cost more.
"There are budget accommodations; you can stay in places that have kitchenettes, and you can eat cheaply," said Edward Hasbrouck, author of of
The Practical Nomad
. "But comparable quality hotels and comparable restaurants are more expensive in Europe than in the U.S. People shouldn't rule Europe out, but it can be more expensive."
While there are certainly parts of Europe where values can be found -- airfares and hotel rates are not unreasonably high all over the entire continent -- many values are in markets that are not necessarily as popular with Americans. And sadly, most of the best deals are already gone.
"There are fewer seats going to Europe than there were in the summer of 2001, so there's a lot of sticker shock at airfares -- not only because prices are higher but because the cheap seats are gone sooner," said Hasbrouck. "It's already very late if you're trying to book flights to Europe for the summer."
Ultimately, no matter how good that deal is, there's no escaping the sticker shock that comes with a simple currency exchange.
How Two Euros Equal $21
A year ago, summer deals to Europe were far more common, as travelers stuck closer to home in the aftermath of the war in Iraq and the outbreak of SARS. But the European travel market is coming back strong, even in seasonally weak periods, and prices are rising, according to a study from Deloitte.
"As occupancy levels continue to grow across Europe, we should start to see rises in room rates," noted Marvin Rust, hospitality managing partner at Deloitte, in the report.
Over the last year, the average European room rate during March rose to 103 euros from 101 euros. (And that's the
rate.) The difference in price is just 2 euros, which doesn't seem like much -- until you factor in the currency affect. And therein lies the rub.
In March of 2003, one euro was worth about $1.05, which put the average room rate at $106. But this March, one euro was worth about $1.24, putting the average room rate at $127. As a result, while prices appear to be up just 2 euros year-over-year, in American currency, they're really up $21.
A mere $21 may not seem like a big deal, but it adds up over seven days of shopping excursions, day trips to wine country and dining al fresco -- and it adds up even faster at the high-end hotels.
Some operators, such as the Radisson Edwardian Hotels in London, fearing that the high euro, and for that matter British pound and Swiss franc, will dissuade Americans from heading their way, are listing hotel rates in American dollars rather than the local currency, while guaranteeing a better deal through a favorable exchange rate. Likewise,
is guaranteeing a one-to-one exchange rate between the euro and dollar for travelers who book a room at one of its Italian properties before July 1.
But many companies are leaving rates unchanged and making no concessions for exchange rates. Some smaller tour operators are passing costs to customers.
, for example, has begun adjusting its package rates according to the daily exchange rate. Other tour operators are simply raising their prices by a flat rate, unable to handle the currency weakness and betting that demand will stay firm.
Then there's the pent-up demand for European travel. Through March, hotels in London were nearly three-quarters full, and they will be completely full this summer. Furthermore, the average room rate is rising in some of the more popular destinations, including London, Rome, Vienna and Lisbon.
Phil Carpenter, vice president of marketing for SideStep, an online travel agency, says travelers are "going to need to make their money work harder. You've got more expensive choices there, a very popular travel season -- you need to do a bit more hunting to find truly good hotel bargains."
While Europe is looking more expensive and crowded than ever this summer, travelers looking for great value and trips off the continent need only look toward the U.S.' sun-drenched backyard -- the Caribbean Islands.
The rise of low-cost carriers is making it easier -- and cheaper -- to fly to the islands than ever before. Over the last six months, an ever-increasing number of airlines have been adding new flights and routes, prompting rivals to follow suit and triggering fare wars that have lowered ticket prices.
This spring and summer,
has targeted the Caribbean, expanding its daily service to Puerto Rico, where it flies to San Juan and Aguadilla, and to the Dominican Republic, where it flies to Santo Domingo and Santiago. All told, JetBlue has at least 11 daily flights to the Caribbean, up from just four last year.
Delta Air Lines
have added routes. In addition, most carriers serving the market have offered sales. And frequent flyers can get a great deal as well. To counter JetBlue's expansion,
, a unit of
, is offering double frequent flyer miles for anyone who travels between New York's John F. Kennedy Airport and San Juan, Santo Domingo or Santiago.
Package Together a Great Deal
But to get the best deal, instead of shopping for airfares and hotel rooms separately, savvy travelers should shop for packages.
"In the case of the Caribbean, nine times out of 10, you're in better shape buying a package," said Geoff Silvers, director of merchandising for Orbitz. "What ends up happening is the discounting is done wholesale and sold when paired up with hotel rooms. Hotels know they need the travelers to get there, so they offer low rates that are paired with airfare."
Travelers with a taste for gambling, scuba diving and musical entertainment might want to consider a package offered by the Wyndham Aruba Beach Resort and Casino at Orbitz.com. For under $1,000 per person, the package includes round-trip airfare from New York, transportation to and from the hotel and five nights at the four-star resort, which sits right on Aruba's white sand beaches. In addition to the beach, the Wyndham offers a number of amenities and activities, including Las Vegas-style shows and nightly gaming in the Casablanca Casino.
Golfers looking to play a few rounds in the Jamaican sunshine can get another great package at Travelocity. For under $1,100 per person, travelers can fly round-trip from Philadelphia and stay five nights at the luxurious five-star Ritz Carlton Golf Spa Resort Rose Hall in Montego Bay, where the rooms feature white marble bathrooms, Internet connections and twice-daily housekeeping services. The Ritz has full spa services, sits on an 18-hole championship golf course and is directly across the street from the historic Rose Hall Great House.
Fans of the all-inclusive resort should check out the Dominican Republic, where there are a number of affordable deals that are a pittance compared with what you'd spend at Sandals. A full week at the Costa Caribe Coral by Hilton, just 45 minutes from Santo Domingo, including round-trip airfare from Boston, is just $943 per person at Expedia.com. The price includes more than airfare and hotel, however -- it includes round-the-clock food and beverage service, a bustling disco and casino scene at night and all kinds of water sports.
If your heart is absolutely set on Europe, then prepare to pay a premium for the experience -- your money won't go all that far. But if you're willing to trade those Parisian strolls, Venetian boat rides and English castles for azure skies, jet skiing and slot machines, the best deals may be closer than you think.
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