By SAM KEMMIS NerdWallet
Flying to Europe this year may seem as absurd as opting for premium gasoline. With prices so high, is it really a good time to splurge?
“Because of labor shortages and all that’s going on, travel is costing more than it has in quite some time,” says travel journalist Oneika Raymond. “Flights are really expensive. Housing is really expensive. And the journey of revenge is one thing.
Although travel prices continue to climb overall due to limited supply and growing demand, pockets of affordability remain.
Europe represents one such pocket, where weakening exchange rates against the dollar and weak demand have left prices relatively unscathed. In fact, flights within the United States have become so expensive this year that some international destinations, including many in Europe, are offering a relative bargain.
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“If you’re willing to pay to fly domestically, check out international destinations,” suggests Hayley Berg, chief economist at Hopper, a travel booking app. “Because there’s a good chance there’s a flight to somewhere else in the world for around the same price.”
Airfares are less inflated in Europe
Domestic airfares were 30% higher at the end of May 2022 compared to May 2019, according to data from Hopper.
“This summer, plane tickets to the United States will cost between $600 and $800,” Berg says. “At these prices, you can get to Reykjavik, Iceland, or Dublin, Ireland.”
Indeed, flights from the United States to Europe were only up 13% at the end of May 2022 compared to the same period in 2019, according to Hopper. This trend is consistent with tourism demand, which remains below pre-pandemic levels: About 19% fewer U.S. travelers departed 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 high price of domestic airfares, you can get more for your money with longer-haul destinations,” says Berg.
The dollar is strong
Although 2022 could become a bear market for everything from stocks to cryptocurrency, the US dollar has been gaining ground against many foreign currencies. The dollar was 15% stronger against the euro in May 2022 compared to May 2021, according to data from the Federal Reserve.
“Today what we see is that a dollar can buy more euros than it has been able to since the launch of the euro,” says Berg.
This means that any purchase made while traveling in countries that use the euro will benefit from a 15% discount, if exchange rates remain stable. American travelers will enjoy this benefit on everything from food and accommodation to events and transportation.
Of course, global inflationary pressures continue to drive up prices everywhere, including in Europe. According to the Financial Times, annual consumer prices in Germany rose 7.9% in May, slightly less than the 8.6% increase in the United States. Still, while prices may remain high almost anywhere, the relative strength of the dollar may help soften the blow.
transportation can help you save
Inflation has affected no aspect of travel more directly and dramatically than the cost of renting and operating a vehicle. Rental car prices rose 69% in May 2022 compared to May 2019, according to data from the U.S. Bureau of Labor Statistics. And everyone knows how much gas prices have gone up.
These factors should make this summer the transit summer for money-conscious travelers. Yet the United States offers few tourist destinations that can be explored by train.
This is not the case in Europe, where most popular cities offer safe, affordable and reliable public transport. Cities like Amsterdam, London and Copenhagen can be explored for just a few Euros, which equates to just a few US dollars with favorable exchange rates.
Visiting national parks in the United States made sense in 2020 and 2021 for a multitude of reasons. But saving money in 2022 means skipping cars altogether when possible.
Off the beaten track?
We are indeed in a strange time when traveling in Europe represents an off-the-beaten-track and economical choice. 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 United States has dropped its testing requirements for arriving travelers, which has made it difficult to leave the country.
It all combined to make Europe a good choice for travelers in an upside-down year. Riding the rails in Zurich might be cheaper than renting a car in Cleveland.
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