- A weaker dollar means more expensive vacations to Europe and Japan this year.
- The buck has fallen by 7% to 10% against the euro, pound, and yen since January.
- Hotels, dining out, local transportation, and entertainment could all cost more in dollar terms.
Vacations in Europe or Japan this summer are poised to cost you more than you might have expected due to a weaker US dollar.
In mid-January, a buck was worth 0.98 euros, £0.82, or 158 yen. Now a dollar is worth 0.88 euros, £0.75, or 143 yen, representing declines of around 8% to 10% relative to the European, British, and Japanese currencies. The dollar is now trading at about a three-year low against the euro.
The greenback has most recently lost ground because of President Donald Trump's tariffs, which have reignited fears of inflation and recession and soured investors on US assets.
The dollar's depreciation threatens to squeeze travelers' budgets this summer. They're poised to pay more in dollar terms for everything from accommodation and dining to local transport and entertainment.
Here's a breakdown of how much a vacation costs at the current exchange rate compared to January's peak, based on two travelers visiting at the start of June:
Hotel for five nights
- Park Plaza London Westminster: $1,869 vs. $1,714
- Hôtel 31 — Paris Tour Eiffel: $1,687 vs. $1,524
- The Royal Park Hotel Iconic Tokyo Shiodome: $1,680 vs. $1,500
Dinner at a restaurant
- The Ivy Market Grill, two Sunday roasts with a bottle of wine and service charge: $150 vs. $138
- Bistrot Paul Bert in Paris, two beef fillets with fries, a bottle of wine, and service charge: $149 vs. $135
- Maisen Iridori, two bento boxes and a bottle of chardonnay: $49 vs. $44
Local transportation
- One-day London Travelcard: $21 vs. $19
- Paris Metro Mobilis day pass: $23 vs $21
- Tokyo 1-Day Ticket: $11 vs. $10
Entertainment
- Good seats to see "Mamma Mia!" in London's West End: $340 vs. $312
- Tickets to see the "Moulin Rouge" in Paris: $303 vs. $274
- Tickets to Asakusa Kaguwa Cabaret Show: $77 vs. $69
These examples suggest a pair of travelers can expect to spend $150 more a week on hotels, an extra $10 on a nice meal, a couple bucks more on public transport passes — and as much as $30 or $40 more on a show than they would have paid at January's exchange rates.
David Rosenberg, the president of Rosenberg Research and the former chief North American economist at Merrill Lynch, told Business Insider that the dollar's weakening could deter some Americans from traveling to places such as the UK and Europe.
He said that households might scrap their travel plans as recessionary pressures mount.
"Something tells me that the typical family vacation this summer is going to involve a bat, ball, and baseball glove in the backyard," he said.
See the latest EUR-USD movements here.
