The Financial Case For Foreign Travel, Despite All The Hassles

It’s expensive to travel to Europe. And you’ve heard all the horror stories about the lost luggage and the cancelled flights. To experienced traveler Lewis Walker, a financial planning and investment strategist at Capital Insight Group in Peachtree Corners, Ga., journeying abroad is worth every dime. He breaks down the outlays for us:

Larry Light: The Louvre, the Vatican, Buckingham Palace—these tourist venues are worthwhile to see, sure. But why pay a fortune when you can vacation in the U.S. for less?

Lewis Walker: Colin Treadwell is a travel writer with Tauck, a U.S. based high-end tour operator. He has extolled the virtues of travel and exploration as a path to “learning something new.”

And there’s good news on that front. Yes, inflation is raging and air fares are up significantly compared to the recent past, but travel demand remains strong and there’s some relief in the strength of the U.S. dollar versus leading global currencies. Consider Europe as a destination.

Light: Break down the costs for us, please.

Walker: As of last week, it took $1.02 to buy one euro, the lowest level it’s been in years. On May 10, AFARAR
magazine reported that a year ago at a rate of $1.20 to one euro, hotels and other items in Europe were much more expensive compared to now. AFAR cited a favorite new Paris hotel, Hotel Paradiso, which offers rooms starting at 176 euros per night. At the rate of $1.20 to one euro, the cost was $211 per night. Now it’s $185 per night.

Light: It’s not just Europe that’s a bargain, right?

Walker: Dollar strength is not confined to Europe’s currency. The dollar has reached the highest level against currencies of key trading partners since 2002, even with American inflation raging. “The greenback’s climb has sent the euro, British pound and Japanese yen tumbling,” said the Wall Street Journal.

While currency changes are hard to predict, many forecasters expect dollar strength to continue, presenting conundrums. A strong dollar makes many imports cheaper while making American exports more expensive for foreign buyers. But for travelers busting loose after pandemic restrictions, a mighty greenback is a boon.

Light: A lot of Americans are taking advantage of that, apparently.

Walker: Per AFAR, 2022 summer travel bookings are up 200% compared to 2021. An experienced travel agent can be an asset in helping you to sort through options.

For those with flexibility, a fall visit may be a better play. Europe in the summer can be hot and crowded. If you want to use airline or other travel points, availability may be greater in the fall or off peak. For winter travel, consider the balmy southern hemisphere. With lower demand, air fares may be less onerous.

Light: And the learning experience is priceless.

Walker: St. Augustine of Hippo lived from 354 to 430 A.D., a time when the understanding of the world was far smaller than today. Nevertheless, as a visionary he wisely advised, “The world is a book and those who do not travel read only one page.”