By Jane Young, CFP, EA
This is a good time to start planning for travel to Europe. The cost to convert dollars to euros is extremely favorable which significantly mitigates the high rate of inflation. The euro is unlikely to rebound any time soon due to the Ukrainian war – which may push Europe into a recession. Additionally, most COVID restrictions have been lifted and European businesses are welcoming American visitors.
The location you select and the time of year you travel can have an enormous impact on your wallet. Some less expensive countries include Bulgaria, Kosovo, Hungary, Bosnia-Herzegovina, Armenia, Romania, Serbia, and Poland. Some moderately expensive countries include Portugal, Spain, Estonia, Latvia, Lithuania, Croatia, and Greece. You can also save by spending less time in capital cities and more time in the countryside and charming little villages.
Additionally, it is less expensive to travel in late spring and early fall. During shoulder season, you will also enjoy moderate temperatures and fewer crowds.
Lodging is the second most expensive part of a European vacation, after airfare which I addressed in my previous article. Avoid staying in large name brand hotels. Instead, consider staying off the beaten path in an apartment or condo, a Bed and Breakfast, a family run boutique hotel, a farm stay, or a nice hostel. Many of these will be in neighborhoods providing a more authentic cultural experience at a much lower price. A place with a kitchen gives you the added bonus of saving on meal expenses.
Airbnb.com and VRBO.com are valuable resources for finding apartments and condos to rent. You can also use aggregation sites such as Booking.com and Expedia.com to search for several types of lodging. Once you select something on an aggregation site, compare prices with what the property will charge if you book direct.
Transportation can be another big expense, but you do not need or want a car in large cities. Most cities in Europe have safe, efficient, and economical public transportation. You can also save by using Uber instead of a taxi.
You can travel between most regions by train or ferry. If you need a car to explore areas with limited train service, reserve a rental car in advance and return the car in the country where it was picked up to avoid exorbitant drop fees.
You will need money on your trip and credit cards are an excellent way to cover your expenses. Use a card that does not charge foreign transaction fees and always pay in the local currency rather than U.S. dollars. The best option to meet day to day cash needs is using ATM machines. Be aware of transaction fees and talk to your bank to negotiate a lower fee before you leave. If you need money immediately upon arrival, consider converting money before travelling or at the ATM in your arrival airport. Avoid exchanging money at airport kiosks, they charge high fees and have unfavorable exchange rates.