Where a strong dollar or euro can make a vacation cheaper and in which countries you might pay more.
For many, the beginning of the year is associated with planning a vacation. The reasons include various first-minute discounts and a wider choice of accommodations. Where to go and how much it will cost are questions many households are asking. If they choose a non-euro or non-dollar destination, their costs can be increased or decreased by the exchange rate of their home currency to that of the destination country.
Such movements are reflected in the prices of package tours from travel agencies as well as in the budgets of individual travelers. So, where can you get more for your money, and where, on the contrary, will your stay be more expensive? Whether you choose Carnival in Rio, Turkish beaches, or admiring the blooming Japanese cherry blossoms, from the perspective of currency strength, it might be the right time to travel to these destinations.
On the other hand, for American or British experiences, as well as for exploring Poland, travelers might currently pay more. Since the beginning of 2024, the euro, for instance, has strengthened against several currencies. This means that for our currency, we can get more of a foreign currency, which should allow us to buy more consumer goods abroad. The development in Turkey is interesting, as its currency has sharply weakened in recent years.
Turkey is an extremely popular destination for many European tourists. According to data from the Statistical Office of the Slovak Republic, in 2023 (the latest available data), Turkey was the most visited tourist destination for Slovaks within organized tourism, with almost 210,000 vacationers. This was an increase of almost 60% year-over-year. The euro recorded its highest value increase against the Turkish lira last year.
Compared to the beginning of 2024, it strengthened by as much as 16%. However, if we take a two-year period, the strengthening was over 80%. Last year, the euro also rose significantly against the Brazilian real, by almost 12%. Currencies of Hungary, Russia, Korea, New Zealand, and Japan also weakened against the euro. The examples of Brazil and Japan, which are not top destinations for many due to long distances, show how such exchange rate movements can boost tourism.
Last year, a record 37 million tourists came to the land of the rising sun, an increase of 47% year-on-year, partly due to the weak yen. The influx of tourists to Brazil was also record-breaking, with the weakening real also playing a role. However, it should be emphasized that the exchange rate is not the only factor affecting tourism costs.
Price development (inflation) in these countries is often different from the situation in the eurozone or the US, which affects the real cost of goods and services. By combining these two factors – exchange rate changes and differences in inflation – we can better determine where residents of the eurozone, for example, will have a cheaper vacation and where they might expect higher costs.
Although, as she adds, even this calculation is not entirely accurate, as it is based on data from statistical offices and the entire consumer basket, which is not typical for vacationers. When considering exchange rate changes and changes in consumer baskets, it appears that for residents of the eurozone, a vacation would be cheapest in Brazil compared to the previous year, where prices, after accounting for year-on-year inflation and exchange rate changes, would be 8.5% lower.
A vacation might be about 5% cheaper in South Korea or New Zealand. Holiday destinations like Hungary or Sweden should also be cheaper than last year. Conversely, a vacation is more expensive when comparing year-on-year exchange rate changes along with inflation in Turkey, where high inflation and only a slight weakening of the Turkish lira last year increased prices for eurozone residents by 22%.
Costs are also higher in the USA (by 7%), the United Arab Emirates, or Poland. Wherever vacationers go outside their currency zone, it’s good to ensure they pay and exchange money at the best possible rate and with minimum effort. This is made possible, for example, by electronic wallets and multi-currency cards. From our long-term experience, we recommend using a platform like Revolut.
Our editorial team has regularly used Revolut on foreign trips outside the eurozone. The biggest advantage is that when paying in the local currency, the conversion is done at the mid-market exchange rate at that moment. A virtual debit card is also available, allowing for cashless payments in stores, mobile transactions, and contactless cash withdrawals from ATMs worldwide. It can be added to Apple Pay and Google Pay wallets.
Tips on how to pay, exchange money, and withdraw from ATMs safely and without unnecessary fees in non-euro destinations:
- Check the availability of card payments and the ATM network in the area you are traveling to.
- If you have the option, use so-called multi-currency payment cards for payments, where the currency exchange is most favorable. A digital version is also sufficient.
- If you want to exchange your home currency for local currency, beware of exchange offices in questionable places. It’s better to turn to banks.
- Withdrawing cash from ATMs might be more advantageous. Do it with a debit card, not a credit card, which has higher fees.
- If you are offered the option of dynamic currency conversion (DCC) when paying or withdrawing cash from an ATM, decline it and make the payment or withdrawal without conversion. This is usually the more favorable option.
- If you find a bank in the country from the same financial group as yours, withdrawals might be cheaper. However, it’s best to check the foreign fees with your bank in advance.