Dollar Value in Europe Is Better Than Last Year

If you were preparing for a European vacation at this time last year, you probably remember the sinking sensation you felt, looking at foreign currency exchange rate tables. Between January and June of 1995, while about 8.6 million Americans were getting ready for their big trips, the dollar fell about 3% against the English pound, 10% against the French franc, 12% against the German mark.

The dollar even lost a little ground against that former chronic inflation victim, the Italian lire. This trend didn’t keep people from traveling to Europe, but it did deal them some blows once they arrived.

This year, happily, looks like a different story.

Between May 1995 and this month, the dollar has gained roughly 4% to 10% in value against European currencies, with the notable exception of Italy, where the dollar has weakened further. On the whole, for the roughly 9 million Americans whom the European Travel Commission expects to reach Europe in 1996, the Continent looks to be a bit less expensive than it was this time last year.

Here are figures from Ruesch International for leading destinations for American travelers in Western Europe. Readers should note that the 1995 figures are as of April, the 1996 figures as of May 2. The numbers quoted are inter-bank rates, based on transactions of $1 million or more--better rates than independent travelers will get by trading their cash or traveler’s checks at foreign-exchange offices, hotel cashier desks or even banks.

The way to get the best exchange rate as an American in Europe, authorities agree, is generally to make your purchases with a credit card. (Credit card-issuing institutions, trading money in large volumes, get the best inter-bank rates, and pass much of that value on to their customers.)

Austrian schilling: U.S. dollar is up 8.8%

Belgian franc: Dollar up 9%

British pound: Dollar up 5.4%

Dutch gilder: Dollar up 9.4%

French franc: Dollar up 7.1%

German mark: Dollar up 9.1%

Greek drachma: Dollar up 7.1%

Irish punt: Dollar up 5.2%

Italian lire: Dollar down 9.9%

Spanish peseta: Dollar up 3.5%

Readers can find current exchange rates for more than 40 nations, as reported by Thomas Cook Foreign Exchange, on this section’s Travel Statistics page.

Travelers should bear in mind that foreign-exchange trends alone are an incomplete gauge of overall affordability. For instance, just because the franc is falling and the lire is rising doesn’t mean a Coca-Cola will cost you less in France than in Italy; in fact, the opposite is probably true.

Allen J. Stolz, chief executive officer of the Jet Vacations tour company, says exchange rates seem to have virtually no effect on the number of customers he gains year by year. In fact, he said, last year, as the French franc was gaining against the dollar, Jet Vacations was having one of its best years ever.

But it pays for a traveler to know which way the wind is blowing. Otherwise, you can end up like those sticker-shock-afflicted tourists Stolz hears from occasionally. “If they paid $20 for a glass of orange juice, you can bet they’re going to tell people about it.”

Another strategy to prepare yourself for Euro-prices is peeking at cost-per-day estimates by Runzheimer International, a consulting firm that assesses prices in leading cities throughout Europe (and elsewhere), telling businesses how much their employees can expect to pay when in town.

Before the Runzheimer numbers below send your heart into arrhythmia, however, take note that the firm sets its per diem estimates using lodging in business-class hotels (roughly at the level of Hiltons and Hyatts) and business-class restaurants. Staying at budget or tourist-class hotels (closer to the Holiday Inn-Best Western level) and eating informally, a pair of leisure travelers could realistically set themselves a goal of each spending half the going Runzheimer rate.

Here are figures from Runzheimer’s last survey of major European cities. The first number is the cost of a hotel room (for a business traveler staying alone) and three meals in February 1995; the second number covers the same expenses, adjusted in February 1996:

Amsterdam: formerly $288 daily, now $292.

Athens: formerly $307, now $310.

Barcelona: formerly $191, now $194.

Brussels: formerly $322, now $345.

Frankfurt: formerly $299, now $310.

London: formerly $337, now $321.

(Other key European cities, including Rome and Paris, have not been surveyed yet this year, Runzheimer officials said.)

If numbers leave you cold, here’s some adice, attributed to 16th century writer and traveler John Florio:

“If you will be a traveler,” he wrote, “have always the eyes of a falcon, the ears of an ass . . . the shoulders of a camel, the legs of a stag, and see that you never want of two bags very full, that is one of patience and the other of money.”

Reynolds travels anonymously at the newspaper’s expense, accepting no special discounts or subsidized trips. To reach him, write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053; telephone (213) 237-7845.