The value of the dollar has taken a huge hit around the globe over the past decade, which is making world travel more expensive for Americans. If you are looking to travel overseas, then you are still likely to get your money’s worth if you go to the UK and Europe, dollar for dollar. Economists are warning those who want to travel to more distant lands that their dollar might not be worth much in 2018, although the dollar is hopefully on an upswing. The value of the American dollar slid nearly 10 percent in 2017 compared to the British pound and the Euro.
It isn’t just in the UK and Europe that the exchange rate of the US dollar is faltering. There are many countries where your money won’t go as far as you might think. Even our neighbors in Canada aren’t giving as much as they did in previous years. The exchange rate will only grant you about .25 per dollar, but that is less than it was in just May of last year. Other countries’ currencies, like Mexico, South Africa, and the Swedish koruna, are on the upswing and making gains against the dollar. So those exotic places where Americans used to travel and spend very little are getting much more expensive.
The good news is that although the US dollar exchange rate has been on the decline over the past decade, it is up from where it was ten years ago, which means that you will get more for your money today than you did in the late 2000s. When you are going to travel, keep in mind that if you are going to exchange your dollar, try to avoid the automated teller machines at airports. They typically charge as much as 15-19% for every transaction. So don’t wait until you get overseas to make the exchange, or you could be throwing money out the window.
There is no doubt that foreign travel has been on the decline. Many airports around the world are seeing far less travel then they have in the past. Whether it is due to fears of terrorism or a shrinking disposable income for the average American, not as many people are traveling globally unless they have the reserves to do so.
But one saving grace is that due to this decrease in foreign travel, airlines are offering much cheaper airplane tickets for those who are going to fly overseas. Even if your dollar isn’t going to be worth as much, the price of getting where you want to go will be less. In the past, the airfare to go overseas could be the biggest cost. Once you got there, however, you were able to spend barely anything because of the strength of the US dollar.
Things have changed for those who want to travel to other countries. Although the world has gotten a whole lot smaller and the options for travel have increased, with a shrinking US dollar exchange rate many are opting to stay in the US and vacation instead of spending more time and money going overseas. If the US dollar can start to gain speed again and the US exchange rate can increase, perhaps people will start to hop on planes and see the world – or maybe they won’t.
There are likely many factors causing people to travel less than they used to. Turmoil around the world, less disposable income, and threats of terrorist attacks when not on US soil, are all things that might be dissuading people from going to the outbounds of the earth. But if the dollar can make a comeback and the airline tickets continue to remain low, there just might be a resurgence. For now, travelers will have to take the tradeoff that the airfare is less, and maybe stick to those places like the UK and Europe where their dollar is still a good buy.
Hopefully, the strength of the US economy and the rate hike of the Federal Reserve will restore the reputation of the US dollar to make it worth more. 2018 might be a bumpy ride not just for those looking to travel, but also for those who deal in exchange rates.