A Stronger Dollar Means Real Travel Savings

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Less than a year ago, travelers from overseas were flocking to the U.S. to take advantage of a weak dollar. Now the tables have turned. Economic turmoil has sapped the strength of most foreign currencies while boosting the value of the dollar, making nearly every country in the world much more affordable for American travelers.

"Americans with travel plans should be feeling good," says Tom Parsons, CEO of discount travel Web site Bestfares.com. "Their buying power is strong again."

The dollar's surge has brought ever-popular, and notoriously expensive, destinations in the U.K. and Europe back into reach. The euro recently hit a 2 ½-year low against the dollar, trading at $1.29, and the British pound fell to its lowest level against the dollar in five years: $1.62. It costs 12 euros to take an elevator to the top of the Eiffel Tower in Paris. That amounted to nearly $20 last July, but just $15 these days.

That said, you'll find the real deals in more exotic locales.

Iceland's krona lost about half its value against the dollar during the past year. Now the typically pricey Arctic island is a potential destination even for travelers with tight budgets. Visitors can settle into one of Reykjavik's luxury hotels and take day trips to the island's glaciers, thermal spas, fjords and other natural wonders. A guided snowmobile tour of the spectacular Snæfellsjökull glacier costs 8,500 krona, currently about $72 and $141 a year ago. Round-trip tickets to Reykjavik from New York have recently been selling at bargain rates of less than $500. One caveat: Restaurants, hotels and other businesses are starting to list prices in dollars, making it harder for Americans to take advantage of the sinking krona.

Sunbirds should consider the southern hemisphere, where summer is about to begin. Australia's dollar recently hit a five-year low of about 60 cents to the U.S. dollar. What's more, airlines are offering unusually low airfares to the island: Round-trip flights from Los Angeles to Sydney have been going for less than $800. Parsons says he can't remember when traveling to Australia was a better deal: "Not only are we getting more bang for our buck when we go there, we are also getting more bang for our buck on the airfare."

South Africa has plenty to attract adventurous types, from safaris in the nation's vast national parks to some of the best surfing in the world. The country saw its currency fall more than 40% against the dollar in the past year. Last summer you would have needed about $70 to pay for a one-day "surf tour" that cost 500 rand. At current exchange rates, you could budget about $45. Getting to South Africa is still pricy, though, usually upward of $1,200 round trip from New York.

Brazil, Denmark and Argentina are among the other destinations where your dollar will stretch surprisingly far. As a rule of thumb, the countries suffering the most from the economic crisis tend to offer the best deals for travelers.

Americans won't find their dollar stretching further everywhere. The Japanese yen has strengthened considerably against the dollar, and airfare to the island remains steep. Most Caribbean currencies are closely tied to the greenback, which means travelers to the islands don't have much to gain from a stronger dollar. That said, many resorts and travel companies are slashing the prices on travel packages to avoid losing business during the economic downturn.

If you're longing to take that dream trip, now could be the time to pull it off with minimal impact on your wallet. Just keep in mind that current conditions might not last long: The dollar could sink just as quickly as it regained its footing.

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