Many people dream about trips abroad, and base their destination wish lists on factors such as natural wonders, culture, food, adventure, and activity options. However, since all trips cost money, and since most trips abroad will be paid for with foreign currency, the current value of your own currency can matter immensely. In fact, exchange rate movements should be a significant factor in deciding where to go on vacation!
In 2016, the US Dollar made significant moves against foreign currencies, both gaining value and losing large amounts against a variety of other countries. Consequently, when planning your spring break, summer vacation, or fall getaway, you should take a look at these winners, where the dollar made large strides in value. Since four of the top six destinations are developing countries, overall goods and services will tend to be cheaper; you can expect hotels, transportation and food to be a real bargain.
Fitz Roy mountains in Argentina, source flickr.
Winner #1: Argentina
In 2016, the Argentine peso lost over 18.5% of its value against the U.S. dollar, as a new government had recently assumed power, and commenced the necessary adjustment to a previously expensive currency regime. As a result, if you are a U.S. based traveler, thanks to the pesos weakening, you just got almost 20% off of all your purchases in Argentina! In fact, Argentina’s currency weakened relative to most major currencies – including the euro – so it’s a bargain for most travelers this year.
Some of the perks of traveling to Argentina from the U.S. include a similar time zone, modern amenities, very good food (think delicious Argentine beef if you are a meat eater, lovely wine such as the famous Malbecs, and anything with dulce de leche in it), cultural wonders, and the natural beauty of Patagonia.
Winner #2: Turkey
Turkey’s currency, the lira, lost over 17% relative to the dollar last year. Besides some questionable economic policies, part of the cause of the plunge has sadly been ongoing terrorist bombings which are keeping business away. Since tourism has suffered, many stellar hotels and resorts are offering deep discounts. The currency move is an added bonus for the foreign traveler.
If these events calm down, Turkey offers a dream of a vacation. Istanbul itself is a marvelous confluence of East meets West, where the hemispheres meet. The skyline, the river, the food, the shopping…all are a blend of modern meets ancient. Further afield within Turkey are glorious beaches, ancient ruins, and valleys of butterflies. This country is definitely worth a gander!
Winner #3: Mexico
Mexico had a tough year in 2016, thanks in no small part to the threat of “wall-building” by U.S. politicians-to-be. As worries about the future path of the economy weighed on financial markets, the Mexican peso took a beating, also losing a whopping 17% of its value against the dollar last year.
Oaxaca market. Source: Neverending voyage.
Mexico offers many types of travel opportunities. If you want to experience a U.S. type resort but in a warmer climate, perhaps Cancun is your destination. Head further south of Cancun to Playa del Carmen or Tulum, for a more authentic Mexican (and beautiful) beach experience. Fancy culture? Oaxaca, in the center of the country, has a thriving art community and is arguably the center of gastronomy. Finally, Mexico City has plentiful hip, happening city activities – bars and restaurants aplenty – besides incredible museums and archeological wonders. If you really want to faint over good values in Mexico, check out various Airbnb offers and car rental deals in any of these places for this spring. I have never witnessed such bargains.
Winner #4: Great Britain
2016 was a tumultuous year for the U.K., as its population voted to leave the European Union. After the surprising vote, British financial markets and the British pound plummeted. Even after a rebound, the currency finished the year over 16% weaker versus the dollar. Travelers to England, rejoice!
Most travelers don’t need an excuse to visit London, either for the first time or as a repeat tourist. Besides the famous sites (Big Ben, Tower of London, etc), the city has a thriving theater district, excellent food and shopping, and an extensive night-life. Outside London, tourists can revel in the charm of the Cotswolds, the beauty of the rugged coast lines, and venture to the north (including Scotland), to name but a few of the possibilities – and all at a 15%+ discount.
Winner #5: Sweden
Surprisingly, another developed, rich country made the top 6 list of currency value losers in 2016. The Swedish krona lost over 7% of its value versus the dollar last year. While 7% is not a major sell-off, it is rather large in terms of “rich” country moves. Like many other economies, Sweden has been running low interest rate policies which have in turned weakened its currency. Consequently, tourists get a surprising discount when traveling there.
While not surprising, Sweden gets lumped into a travel destination with its neighbors, particularly Norway and Denmark. Scandinavia offers similar highlights. Stockholm is probably the most popular destination, as the city is full of museums, pretty architecture, and a reputably rocking night life. Outside the capital, nature abounds in a host of islands, regional cities, and last but not least, Lapland. There is still time to catch some Northern Lights!
Winner #6: China
China’s Li River. Source: discoverbeijingtours.com
China is a unique place to visit, as home to the largest population on the planet, and one of the geographically largest countries as well. While considered a far-away destination, airfares are very affordable, and flights are frequent and non-stop from most major airports. China has 14 cities with over 5 million people – and traveling between them takes either a flight or a significant rail journey. With the exception of top hotels in Shanghai, most destinations are affordable, if not downright cheap, without even considering the exchange rate moves. Besides Beijing and the Great Wall, and Shanghai, tourists often consider Xi’an, the Li River, the Yellow Mountains, and Chengdu’s pandas, as separate destinations worth the trip.
These six destinations should offer plenty of diversity for global travelers, and thanks to the strong dollar, bargains as well. Conversely, the places you might want to put lower on the 2017 travel wish-list, as their currencies got much stronger last year, include: Brazil (22%), Russia (20%), South Africa (12.5%), and Colombia and Chile (nearly 6% each). That said, these countries have a low-cost of living so costs there are by no means expensive.