Want to travel to Europe without cashing in your 401(k)?
Well, if your plan includes London, beware: in 2010, the average hotel rate was $209, up 11 percent from 2009. Compare that to Athens, where that rate was just $97, down 18 percent. Kind of makes the Parthenon look better than ever, no?
It turns out that the weak sisters on the fringes of Western Europe are shaping up to offer even greater value for American travelers this spring and summer than at any time since the recent recession began. Like Athens, Dublin has been battered by sovereign debt crises, and hotel prices have dropped there as well. The shaky economies of Portugal, Spain, and Italy are also resulting in lower travel costs in some cities.
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Americans might expect to find improved value even in those European cities where travel prices have held firm or risen slightly, like Berlin and Vienna. The euro declined against the dollar by 13 percent from January 2008 to January 2011, and if that trend continues, you’ll get even more purchasing power in the 17 nations that use the euro. In fact, the relative strength of the dollar may even be enough to offset higher hotel rates in such expensive cities as Amsterdam (up 6 percent in 2010 versus 2009) and Paris (up 4 percent).
The carbuncle on that otherwise pretty portrait is non-euro London. In fact, London is one of the few Western European countries for which the State Department has raised its per-diem limits—up 11 percent, to $503 a day for hotel, meals, and incidentals. Expect no bargains along the Thames this season.
Still, the sunny travel outlook prevails more often than not. In Athens, a two-mile cab ride costs only $3.63, a beer at a café costs as little as $2.74, and the average hotel price in January was a mere $97, down a whopping 18 percent from a year earlier. What’s more, in December 2010 the government reduced its value added tax on hotel stays from 11 percent to 6.5 percent to stimulate tourism.
The poor economy in the former Celtic Tiger holds another bright spot for tourists. For the best value, consider flying into Ireland’s Shannon Airport and enjoying the good values in the west. Dublin is more expensive (a two-mile cab ride will cost you around $11), but even there hotel prices have come down.
So if you haven’t considered Western Europe as a vacation destination in the past several years, 2011 just might be the year you’ll want to return. But be sure you know which cities are good values—and which ones could still put a big hurt on your wallet.