American travelers are finding that vacations are expensive in many parts of Europe. It now takes $1.17 to buy one euro, which cost only 98 cents one year ago. In addition to its weakness against the euro, the dollar is down 6 percent vs. the British pound, in the past year, and is 11 percent weaker, versus the Swiss franc.
Hotel rates and air fares are priced by the travel industry to smooth out currency fluctuations so the pain might not be severe for those items. However, American tourists in Europe will pay much heavier prices for food, entertainment, and souvenir shopping.
Instead of Europe, consider holiday travel to Mexico, where the U.S. dollar is up around 8 percent against the Mexican peso over the past year. Also look at Canada: although the Canadian dollar is up sharply in the past year, the U.S. dollar is still strong up north, bringing about C$1.30 now. In addition to Canadian and Mexican destinations, favorable dollar exchange rates in Costa Rica or Jamaica may offer you affordable fun-in-the-sun this winter.