Basking in a Strengthened Buck? First, Do Homework

Friends of Japan and enemies of the oppressive yen, take heart. The same for you peseta people, and all those who pine for declines of the German mark, the Turkish lira and the Venezuelan bolivar.

Those currencies are among several that have weakened notably against the dollar over the last year. The trend could point the way toward better prices.

Before inhaling too deeply from the figures that follow, however, keep a few background factors in mind. The figures here are retail rates quoted by Thomas Cook Foreign Exchange. The U.S. financial institutions dealing in large volumes of money enjoy lower rates, and travelers who use their credit cards generally get those better rates too.

Travelers also generally can get better rates by avoiding airport and hotel exchange desks, instead trading currencies at banks in their destination country. In early March, for instance, Thomas Cook was selling Mexican new pesos in the U.S. for retail rates of 6.74 per $1. In Cancun, meanwhile, many banks and tourist businesses were giving 7.5 or slightly more Mexican new pesos per $1.

Probably the most notably changed major currency since last year is Japan’s yen. Over the year ended March 11, the yen fell from 98.94 to 114.1 per dollar, a 15% decline. Moreover, that decline followed a similar fall the year before. Since April 1995, the yen has lost about 45% of its value against the dollar.

At the New York offices of tour operator Absolute Asia, sales manager Kate Maxwell says the slide has piqued some travelers’ interest and caused the company to adjust some of its tour prices downward.

The Japanese National Tourist Organization is offering further advice to Americans intrigued by the yen’s descent. In a release last month, the organization pointed out that early April is a popular time to visit because of the widespread cherry and plum blossoms.

Meanwhile, in leading American tourist destinations including Mexico, Canada, Britain and Italy, exchange rates haven’t changed much, fluctuating by less than 10%.

But in each of the countries listed below, currencies have slipped by more than 10% against the U.S. dollar over the last year.

Austria. The schilling fell from 9.39 per $1 on March 11, 1996, to 11 per $1 one year later, a decline of 17%.

Belgium. Over the same period, the franc fell from 27.44 per dollar to 32.5, a decline of about 18%.

Denmark. The krone, slipping from 5.19 to 6.02 to the dollar, also declined about 16%.

Ecuador. The sucre slipped from 2,299 to 3,154 per dollar, a decline of 37%.

Finland. The Finnish mark slipped from 4.17 to 4.7 per dollar, a decline of 13%.

France. The franc fell from 4.67 per dollar to 5.38, a 15% decline.

Germany. The mark fell from 1.35 to 1.6 per dollar, a nearly 19% decline.

Greece. The drachma fell from 220.65 to 246.42 per dollar, a decline of almost 12%.

Holland. The Dutch guilder fell from 1.5 to 1.77 per dollar, an 18% decline.

Portugal. The escudo fell from 137.34 to 156.15 per dollar, a decline of about 14%.

South Africa. The rand fell from 3.5 to 4.01 per dollar, a nearly 15% decline.

Spain. The peseta fell from 113.30 to 134.28 per dollar, a decline of nearly 19%.

Tahiti. The Tahitian franc fell from 81.25 to 93.68 per dollar, a 15% decline.

Turkey. The Turkish lira fell dramatically from 43,478 to 100,000 per dollar, a whopping 130% decline.

Venezuela. The bolivar fell from 263.5 to 411.35 per dollar, a 56% decline.

(For updated exchange figures as of April 1, see chart on Page L25.)

Travelers should keep in mind, however, that exchange rates alone are only a crude measure of fluctuations in a foreign land’s affordability. For instance, if hoteliers scorn local currencies and adjust their rates to keep them consistent in U.S. dollars--as is common in high-end Mexico hotels--then a fall in the peso will make no difference in Cancun or Los Cabos.

Inflation is another key variable. Because inflation within Venezuela ran at an estimated 103% last year, it’s no great advantage that the dollar now buys 56% more bolivars than it did a year ago. Similarly, the dollar’s gains of 37% against Ecuador’s sucre and 130% against the Turkish lira came during national inflation rates in those countries of 25% and about 80%, respectively. On the brighter side for travelers, Denmark, France, Germany, Portugal and Spain each reported inflation rates of less than 5% last year.

Update: On March 23, this column reported that state and federal officials had accused the travel agency World Class Network Inc. of Irvine (along with World Class Travel L.L.C. of Calabasas) of business improprieties (which they deny), and indicated that the Federal Trade Commission won a court order shutting down both companies. In fact, on March 10 a federal judge lifted the injunction that closed World Class Travel L.L.C., and company officials say the Calabasas company has reopened for business.

Reynolds travels anonymously at the newspaper’s expense, accepting no special discounts or subsidized trips. He welcomes comments and suggestions, but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053 or e-mail chris.reynolds@latimes.com.