A dollar that’s no longer so almighty

The sharp decline of the U.S. dollar against almost every foreign currency is the single most significant news in travel. From now on, you’ll want to ponder the currency rates of various destinations before deciding to go.

The dollar’s decline is fairly universal. Although the weakness of the dollar against the euro (now selling for about $1.33) and the Japanese yen (104 to the dollar) has received the biggest headlines, a broad assortment of other foreign currencies have risen just as much.

Remember the Canadian dollar? Two years ago, one U.S. dollar bought $1.56 Canadian -- and everything in Canada cost a third less than we usually expected to pay. Today, the U.S. dollar buys only $1.23 -- and Canada isn’t nearly as cheap anymore.

How about the British pound? Two years ago, you paid $1.55 for one British pound. Today the published rate of the pound is $1.92, and the realistic rate is even worse.

Because you must pay a few percentage points in fees to a money-changer or exchange office every time you change money, you really end up paying $2 for one British pound. Admission to a movie in London, often priced at 10 pounds, now costs you -- the American -- $20.

Even many of the former “soft” currencies have soared in value against the U.S. dollar, though to a lesser extent than the euro or yen. Two years ago, one U.S. dollar bought 9.24 of the lowly South African rand -- and young American couples rushed to enjoy an elegant honeymoon in low-cost Cape Town.

Today, the dollar buys only 5.71 rands, and couples are going to Florida instead. Two years ago, the dollar bought 43 Thailand bahts.

Today it gets you 39.41 bahts -- and though it’s a small drop, it hurts. Even the weak Turkish lira, once selling at an astronomical 1.534 million to the U.S. dollar, has now strengthened to a rate of 1.42 million to the U.S. dollar, and prices in Istanbul are 14% higher for us.

Even in Eastern Europe, which is struggling with grave economic problems, the U.S. dollar has dropped. The dollar now buys only 185 Hungarian forints, compared with 238 two years ago; 3.15 Polish zlotys, compared with 4.01 two years ago; 29 Slovakian koruna, as compared with 42 just two years ago. Even in Bulgaria, the dollar has slipped.

Have any other currencies stayed the same or even weakened against the U.S. dollar?

A handful; Mexico is the most prominent example. Its peso, selling at 10.14 two years ago, is now exchanged at 11.26 to the dollar, a slight improvement for the dollar and a reason for current heavy tourism to Mexico. What about the future? Many experts believe that as long as the United States continues to run a current account deficit (greater number of imports than exports) of nearly $600 billion a year and a government deficit of half a trillion dollars, the dollar will continue to weaken. To Americans, foreign travel will continue to be far more costly than it once was.

So what are we passionate travelers to do? We must lower our sights and choose lesser accommodations and meals. We must travel on a budget, eat where ordinary people eat, stay at pensions and guesthouses, use local transportation in place of taxis and withstand the urge to buy foreign clothing and trinkets.

If we do follow the frugal course, we may even have better vacations.