“AS strong euros and pounds continue to push the price of European vacations higher for Americans, the best strategy to keep travel costs down may be to hedge.
Like portfolio managers who carefully balance out their riskiest investments with safe bets to minimize their exposure to swings in the market, Americans planning trips to Europe this summer can minimize the cost of their vacations, should the dollar drop further, through careful planning now.
One of the most common ways is to buy an all-inclusive vacation like a cruise or packaged tour. Prices of such trips are typically set as much as 18 months in advance so they can be printed in brochures. Travelers who buy these trips lock in the price of their vacations, essentially shielding themselves from any price increases caused by currency fluctuations.
For example, Collette Vacations is offering an eight-day London and Paris package in July for $1,999, or $3,044 with airfare from New York. The dollar has dropped about 15 percent against the euro since the company set those rates more than a year ago. As a result, those customers received a built-in discount.
European cruises similarly stretch the dollar, and you can also pay for onboard purchases like spa treatments and shore excursions in dollars.
“If anything, the decline of the dollar has strengthened the attractiveness of an all-inclusive cruise product such as ours,” Ana Figueroa, director of business development for Amadeus Waterways, wrote in an e-mail message. Already, she added, the company’s summer river cruises in Europe are full.
It’s possible to hedge without going the all-inclusive route, simply by prepaying as much as you can — for things like hotel rooms, airfare and car rentals — before leaving the United States.
“The more you can buy in advance, the better,” said Assen Vassilev, co-founder of Lessno.com, an online travel agency that specializes in discount trips to Europe. By prepaying in dollars, he said, “you’re not exposed to fluctuations in the euro” and travelers can also “avoid international fees from credit cards or having to pay exchange fees.” By Michelle Higgnes ( via www.nytimes.com)
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