Being a contrarian traveler is a lot like being a contrarian investor. The latter buys when everyone else is panicking and sells when everyone else is euphoric. If you followed that strategy as I did and pumped up your stock or mutual fund holdings in late 2008, you are looking a whole lot brighter than someone who sold everything at the bottom and went into bonds. About 40% brighter actually.
If you are American and went traveling the world this year instead of sitting at home fretting about the terrible job market, you got to take advantage of a strong dollar combined with a weak tourism market: a golden opportunity to travel better or longer for less. Those don’t come along very often, so kudos to you if you pulled it off. I like to put my money where my mouth is, so I didn’t sit around at home either. I spent most of the summer away, taking advantage of a historically empty (of tourists) Mexico and a great exchange rate.
Ah, good times. Good times. But alas, they don’t last forever. The U.S. dollar over the past year has had an inverse relationship with the S&P 500. In other words, when the stock market is rising, the dollar is often falling. Since the stock market has bounded back and been on a tear the past few months and the economy is showing clear signs of recovering, we’re back to having a limp currency again. Here’s a rundown of how it’s faring compared to the beginning of 2009.
Bad news for the travel dollar
– 5% against the euro
– 11% in the Czech Republic
– 10% in the UK
– 21% in Brazil
– 15% in Chile
– 8% in Peru
– 21% in South Africa
– 11% in Indonesia
– 18% in Australia
– 17% in New Zealand
Still some good news here and there:
+ 11% in Argentina
+ 6% in Costa Rica
+ 7% in Guatemala
+ 3% in Cambodia
+ 10% in Fiji
+ 14% in Ghana
(And if you want to hit some lesser-visited spots, the dollar is up big in Mongolia, Kazakhstan, Armenia, Belarus, and Ethiopia)
Figure that most other places you would want to go fall within a 5% up or down range, including many places highlighted in The World’s Cheapest Destinations, which won’t make a huge difference if you’re a budget traveler.
On a side note, for all the fear and outrage about our national debt, it doesn’t look all that frightening when you compare it to other major economic powers around the world. The Economist has posted a really cool world debt map that shows the total debt level and per capita debt for each country. On a per person basis these countries are all in hock more than the United States: Canada, England, Japan, Iceland, Ireland, Norway, France, Italy, Greece, Germany, and Austria.
