Summer time is upon us and many have either planned or are planning their getaways to far off places. European destinations are popular this time of year with lots of families heading for sightseeing trips to France and the UK while students embark on “Euro Trips” to Spain, France, The Netherlands and many other destinations.
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With many southern European countries continuing to feel the pressure from hard economic times, now is a great time from a budget perspective to travel to the old world. Here are a few options to consider where your hard earned dollars will go farther.
Protests, pension reforms and IMF loans, Greece has been in all kinds of trouble for quite some time now. This bodes well for those wanting to soak up the sights of Athens or the sun in the Greek Islands.
According to some accounts, hotel prices are down 10-15% and food and drink prices have come down as well.
I’ve been wanting to get over to Greece ever since my wife found a tour operator that lets you cruise around the Greek islands while learning how to sail, the experience culminates in one being able to apply for a day sailing skipper’s license!
With high youth unemployment, Spain has also suffered tremendously over the last year. Prices are down around 20% and Spain now ranks as the top value for money destination for British tourists according to The Post Office.
The decrease in prices is helping to drive down youth unemployment as more young people are taking jobs in the tourism industry to help satisfy the increase in demand.
“The Spanish government has said unemployment in the crisis-stricken southern European nation has gone down markedly over the past four weeks. The main reason was a strong tourist season.”
The only downside to this is the tourist season will end eventually, other sectors will have to pick up the slack or the employment situation will return to where it was before.
For those looking for a vacation home, Spain might be an interesting option given the downward momentum in prices coupled with the ability to gain residency with an investment of €500,000 in real estate.
Another beautiful sunny country that has been hit by the great recession, Portugal features at number 7 on The Post Office’s list of destinations offering good value for money. Prices have fallen around 15%.
While in Portugal last year, I was struck by how few North Americas were visiting the country. While many people flock to Spain, France and Italy, Portugal seems overlooked.
The country’s Algarve area is spectacular and is a definite must see. Even though the country has a warm and sunny climate, keep in mind its Atlantic waters are not particularly warm. Its crystal clear coastal waters are clear for a reason, they’re freezing!
Europe is not known as the cheapest of destinations, a round trip flight to Athens from Toronto at the end of August comes in around $1,750. The equivalent for Barcelona will set you back around $1,350.
For those able to wait a few more weeks, the flight to Barcelona drops to around $1,150. Combine these less expensive destinations with a flight during the shoulder season and the savings will really add up.
In order to give a complete picture of costs, we should also take a look at the Euro/Dollar exchange rate. Today, $1 will buy you about €0.73. While this is down from a peak of around €0.81, it’s still quite a good rate compared to the 2008-2009 time frame as illustrated below.
Euro/Dollar exchange rates might not be fantastic but they certainly aren’t bad either, the cheaper prices in the countries mentioned above will certainly make a difference to your bottom line.
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Though Europe may not be the cheapest vacation option, combine weak economic conditions in Portugal, Spain or Greece with a shoulder season flight and you could save $1,000 without much effort on your next cross Atlantic getaway.
Andrew is a Canadian personal finance and investing blogger who recently moved to London, England. He has a background in technology and a passion for travel. His blog, She Thinks I’m Cheap aims to help Canadians build wealth by sharing facts, stories and advice.