Bloomberg Opinion — As the pound and euro struggle relative to the dollar, opportunistic US travelers might be wondering if it’s time to book an international trip, and maybe even prepay for the hotel. Who wouldn’t love a travel deal — especially after paying through the nose this past summer?
But don’t think there are bargain-basement prices everywhere in the UK and Europe. Sure, the dollar may get you 20% more when dining or shopping, but in-demand hotels are still expensive. For example, high-end accommodations in places such as Paris and Capri have increased their rates by as much as 40% and are likely to keep them there, according to Melissa Biggs Bradley, founder of luxury travel agency Indagare.
If the main objective is to stay somewhere special at a hard-to-beat price, you’d be better off in countries like Sweden, Portugal or Turkey. According to travel experts, those destinations are offering the best value when taking currency changes as well as airfare and accommodations into account.
Take the Grand Hotel in Stockholm, a five-star hotel overlooking the Royal Palace, with rooms for less than $300 a night from now through April. Spring break in Lisbon? A nonstop roundtrip on several carriers from East-coast cities will cost less than $500.
For winter travel, Bradley suggests looking into ski resorts in Europe, such as Alta Badia in Italy, which might actually be cheaper all-in than domestic hotspots like Jackson Hole thanks to the strength of the US dollar.
Still, if you have your heart set on a more popular European destination, there are things to keep in mind to make sure you’re still getting somewhat of a deal.
First, think about whether you want to actually spend less on the trip than you ordinarily would have, or spend the same amount and “book up” — that is, stay in a fancier hotel than you had originally envisioned, or book a particular attraction or experience.
Also, consider when you’re going. Fall and winter are considered the shoulder season, of course, so flights tend to be cheaper then. Last spring, airfare jumped 19% from March to April, a record, but has been declining month-to-month since June, according to Scott Keyes, founder of Scott’s Cheap Flights. Keyes says he doesn’t expect fares to jump as much as they did last spring, and instead, to fluctuate more within the typical 5% increase or decrease.
Nonstop flights to London’s Heathrow airport are still close to $1,000 for most of this year and next, but if you’re willing to fly mid-week, you can save more than $300. And if you fly to Gatwick, low-cost carrier Norse Atlantic Airways currently offers flights as low as $400.
Remember, there’s no set day or time to book your trip that will magically guarantee the cheapest airfare. The best advice is to set a Google flight alert about six months out from travel and go from there.
If the price of a flight drops, you can sometimes rebook at a lower price and receive a voucher for the difference to put toward a future flight. That’s thanks to a pandemic-induced change by major US airlines that allows travelers to change an existing flight without incurring a fee. But you’re responsible for continuing to track the flight after booking and noticing that the price has gone down. And if you buy the most basic economy fare, you probably won’t be eligible.
In terms of prepayment, you might want to think twice about paying for your hotel now. Sure, you’ll get a more favorable exchange rate and lock in a lower price, but it’s usually no more than a 10% discount and almost always non-refundable. That just seems too risky given the state of the world.
Another helpful tip from Clint Henderson, an editor at The Points Guy: Check out combination hotel deals from airlines. Henderson says he’s stayed at high-end hotels including the Park Hyatt in Vienna and Adlon Kempinski in Berlin for drastically less thanks to hotel/airline package deals offered by American Airlines and Delta. You can sign up for emails from the carriers directly.
Finally, if you’re shopping for luxury goods in Europe, keep in mind that you’re eligible to be refunded at the airport for the VAT sales tax included in the price of the item at the store, as long as you fill out the relevant paperwork. (Sorry, London shoppers: The UK ended the VAT refund in 2021.)
Given the refund and the stronger dollar, consumers could see discounts of as much as 35% on designer labels bought in Paris or Rome compared to buying them at the brand’s store in the US, says Bradley. Just don’t get carried away and let “discount shopping” wind up costing more than the trip.
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