Destinations Where the Dollar Buys More

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Destinations Where the Dollar Buys More

It's the backpackers' call to India, the lure of Mexico to sun worshippers, and the urge of digital nomads to Thailand: go where the dollar can buy more.

The perennial strategy of cheap travel is getting a boost this summer: the dollar has risen sharply against a number of foreign currencies, including the Japanese yen, as high interest rates from the US Federal Reserve are attracting foreign investment and strengthening the dollar.

“A weaker destination currency means greater value for U.S. tourists,” says Erina Pindar, chief operating officer and managing partner of SmartFlyer, a global travel agency based in New York City.

“This economic advantage could make far-flung dream destinations in Asia, such as Indonesia, Vietnam and Japan, or in South America, such as Peru, Argentina and Chile, more accessible than ever before,” she added.

Flights to more distant destinations are generally more expensive, which – in addition to the physical consequences of jet lag – speaks in favor of the North American neighbors Canada and Mexico, whose exchange rates have long favored the purchasing power of the dollar.

But this year there are some new candidates with attractive exchange rates, including the following destinations.

The US dollar is currently worth about 1.50 Australian dollars, an increase of about 16 percent over the last three years.

The obstacle, of course, is the long flight, which can easily cost over $1,000 round-trip. But travel search engine Kayak lists some attractive summer round-trip fares between the West Coast and Sydney starting at $770, with the best availability in August.

Flying within Australia isn't cheap either, especially since the bankruptcy of budget airline Bonza. Jetstar offers cheaper fares, including recently launched single tickets for $50 between Melbourne and Adelaide.

Campervans can be an affordable way to road trip around Australia. Companies such as Jucy, Britz and Apollo offer vehicles with beds and cooking facilities. Jucy recently offered a two-person van for a week in July for around $53 a night.

The Northern Hemisphere's summer is the Australian winter. If you're planning a ski holiday in the Australian Alps, Tourism Australia recommends avoiding mid-July when schools are out and lots of families are hitting the slopes.

Tipping is not customary in Australia, meaning travelers can potentially save 20 percent on restaurant meals, says Craig Bradbery, chief operating officer of Baillie Lodges, which owns the newly renovated Southern Ocean Lodge, a luxury property on Kangaroo Island.

Many destinations in Southeast Asia, including Thailand, Vietnam and Cambodia, offer attractive exchange rates. In Indonesia, the rupee is at a four-year low against the dollar.

“I would send my clients to Bali, Indonesia,” said Rob Huie, owner of Luxury Travel Services by Rob, based in Millsboro, Delaware, noting that the cost of living on the island is low. “The downside is the higher initial cost of flying there, but once you're there, you can stay in three- and four-star hotels at very reasonable prices, get meals for $10 to $25 a day and massages for $10 to $30.”

Travelers with Marriott loyalty points can redeem at Four Points by Sheraton Bali, Kuta (rooms from $57 per night). IGH Reward members can spend or earn points at Hotel Indigo Bali Seminyak Beach (from $138).

TripAdvisor's list of the best budget hotels in the central highlands around Ubud includes options under $100.

According to the home rental platform HomeToGo, Bali is a good place to look for a vacation rental. Their data shows that the median price per night for a rental in Bali this summer is $86, compared to the median price for a rental in the United States of $388.

“Despite the global strength of the U.S. dollar, prices in the States continue to rise, prompting travelers to look to international destinations where they can get more for their dollar,” says Eleanor Moody, travel expert at HomeToGo, adding that searches for rental properties in Indonesia have more than doubled in the past year.

South America – including Argentina, with its exploding inflation, and Peru, where the sol has weakened against the dollar – is also a good location for value appreciation.

“Stop going to Europe,” said Cecile Blot, owner of Washington, D.C.-based travel agency Boundless Travels, praising “destination imitators” in South America. “Many countries on the southern continent offer the whole package – history, culture, nature, culinary delights, world-class accommodations – at a fraction of the price.”

One of these countries is Colombia, where the dollar was last worth about 3,935 pesos, representing an increase of about 20 percent over the past five years.

“Colombia has something for everyone,” says Stefanie Pichonnat, owner of AAV Travel, based in Terre Haute, Indiana. She cites Cartagena in the Caribbean as a budget-friendly substitute for a European capital and the coastal Tayrona National Park as a cheaper alternative to Costa Rica.

“Coffee lovers can spend days touring the coffee fincas, passionate hikers can challenge themselves and take a trek into the Paramo desert, and birdwatchers will find plenty of opportunities to explore,” she added.

Flights are frequent and inexpensive; a recent search of round-trip fares from the New York area found summer flights to the capital city of Bogotá starting at around $290 and to the coastal region of Cartagena starting at $320.

From Bogotá, visitors can reach Chingaza National Park in the eastern Andes or spend a few days in the laid-back colonial town of Villa de Leyva. However, Colombia's mountainous terrain and dangerous roads often require travelers to take a domestic flight to see other areas.

One of the tour operators that will do the planning for you is England-based Responsible Travel, which offers a customizable 12-day trip to Colombia that visits Bogotá, Medellín and the central coffee-growing region, as well as the lush Cocora Valley with its nearly 200-foot-tall wax palms (from $2,990 per person).

The US dollar is currently worth about 156 Japanese yen, an increase of over 11 percent compared to last year.

Demand for Japan was already booming as the economy improved. BWH Hotels, which includes Best Western Hotels, said occupancy and rates had steadily increased over the past two years due to demand and staff shortages, particularly in popular destinations such as Tokyo, Osaka, Kyoto and Hokkaido.

But with careful planning, Americans can still take advantage of the exchange rate. IHG Hotels & Resorts, which operates chains in the country ranging from the design-focused Voco to the luxury InterContinental, recommends traveling in early July to get the best rates (a night at the Voco Osaka Central starts at $135).

Japan's Hoshino Resorts are more upscale, but their OMO line offers lower-end accommodations, from capsule hotels to full-service hotels. The OMO5 Kyoto Gion, for example, offers rooms for up to six people, including kitchens, starting at 24,000 yen, or about $153. Staff offer free tours of temples in the area.

While admission to many temples, parks and shrines is free, travelers in the capital can purchase the Tokyo Museum Grutto Pass for 2,500 yen (about $16), which includes admission to more than 100 museums and attractions in the city.

One of the things the Japan Tourism Bureau recommends for budget travelers is to make lunch the main meal, as many restaurants offer lunch dishes.

There are numerous inexpensive ways to get around Japan, including trains (a seven-day Japan Rail Pass starts at 50,000 yen, or about $320), low-cost airlines such as Peach and Zipair, and overnight buses.

Or consider hiking the Kumano Kodo pilgrimage route, which connects sacred shrines in the Kii Mountains. Walk Japan offers a self-guided seven-day trip that includes accommodation and most meals from 224,000 yen.

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