Flying to Europe this year may sound as absurd as opting for premium gasoline. With prices so high, is this really the right time to splurge?
“As a result of the labor shortage and everything that’s going on, travel is more expensive than it has been in a long time,” says travel journalist Oneika Raymond. “Flights are very expensive. Accommodation is really expensive. And revenge trips are one thing.”
While travel prices continue to rise across the board due to limited supply and growing demand, pockets of affordability remain.
Europe represents one such pocket, where weakening exchange rates against the dollar and lukewarm demand have left prices relatively unscathed. In fact, flights within the US have gotten so expensive this year that some international destinations, including many in Europe, offer a relative bargain.
“If you’re willing to pay to fly domestic, check out international destinations,” suggests Hayley Berg, chief economist at Hopper, a travel booking app. “Because there is a good chance that there will be a flight to another place in the world for the same price.”
Domestic airfare was 30% higher at the end of May 2022 compared to May 2019, according to Hopper data.
“Airfare this summer within the US will cost between $600 and $800,” says Berg. “With those prices you can get to Reykjavik, Iceland, or Dublin, Ireland.”
In fact, flights from the US to Europe were up just 13% at the end of May 2022 compared to the same period in 2019, according to Hopper. That trend squares with tourism demand, which remains below pre-pandemic levels: About 19% fewer U.S. travelers left for Europe in May 2022 compared to May 2019, before the pandemic, according to data from the International Trade Administration.
Simply put, prices and demand for flights to Europe are increasing, but not as fast as elsewhere.
“Given the price of domestic airfares, you can get more for your money with long-haul destinations,” explains Berg.
Although 2022 may go down as a bear market for everything from stocks to cryptocurrencies, the US dollar has gained ground in many foreign currencies. The dollar was 15% stronger against the euro in May 2022 compared to May 2021, according to Federal Reserve data.
“Today what we’re seeing is that a dollar can buy more euros than it has been able to essentially since the euro was launched,” says Berg.
This means that everything you buy while traveling to countries that use the euro will be discounted by 15%, if currency exchange rates remain stable. American travelers will enjoy this benefit on everything from food and lodging to events and transportation.
Of course, global inflationary pressures continue to push prices up everywhere, including Europe. Annual consumer prices in Germany rose 7.9% in May, according to the Financial Times, just shy of the 8.6% rise in the US. However, while prices may remain elevated almost everywhere , the relative strength of the dollar may help soften the blow.
Inflation has affected no aspect of travel more directly and dramatically than the cost of renting and operating a vehicle. Rental car prices are up 69% over budget in May 2022 compared to May 2019, according to data from the US Bureau of Labor Statistics. And everyone knows how much prices have risen. gasoline prices.
These factors should make this the summer of public transportation for money-conscious commuters. However, the United States offers few tourist destinations that can be explored by train.
Not so in Europe, where the most popular cities offer safe, cheap and reliable transit. Cities like Amsterdam, London, and Copenhagen can be explored for just a few euros, which is equivalent to just a few US dollars at favorable exchange rates.
Visiting national parks in the US made sense in 2020 and 2021 for several reasons. But saving money in 2022 means skipping cars when possible.
We are in strange times in which traveling to Europe represents an unusual and economical option. However, the facts speak for themselves. Airfares to Europe are rising less rapidly than domestic tickets, and fewer travelers are visiting the continent. The dollar is strong and the US has dropped the testing requirement for arriving travelers, making leaving the country a pain.
All of this has combined to make Europe a good choice for travelers in an upside-down year. Traveling by train in Zurich could be cheaper than renting a car in Cleveland.
This article was provided to The Associated Press by the personal finance website NerdWallet.