Americans toast strong dollar while downing cheap European wine

Americans are getting more bang for their buck when travelling through the 19 member nations which share the Euro.

Of the many wonders to behold in Greece, Matt Derr has found a gem: local wine at $3 a glass.

During a nine-day getaway to the land of the gods, he's sampled Greek salads and grilled meats for as little as $7 a plate and learned how to pick the freshest fish for dinner. As a foreign-exchange strategist at Credit Suisse Group AG in New York, Derr has been tracking the dollar's 23 per cent gain against the euro during the past year. That hasn't stopped him from being pleasantly surprised by how far his dollars stretch.

"It's been all about the seafood," Derr said by e-mail Wednesday from the island of Crete, after stops in Athens, the birthplace of democracy, and Santorini, famed for its sunsets. "The biggest benefit I see is just how cheap wine and food more broadly is - as well as the tipping."

Americans are getting more bang - or 90 euro cents - for their buck when travelling in the shared currency's 19 member nations. Derr follows an influx of tourists flocking to Greece, where U.S. visitor arrivals jumped 25 percent to 23,200 in January and February, according to data from the Bank of Greece.

The dollar has advanced against all of its 16 major counterparts since July, bolstered by a stronger economy and the prospect of the Federal Reserve raising interest rates for the first time in almost a decade. At the same time, the euro has been debased by the European Central Bank's unprecedented stimulus plan.

The dollar has strengthened to $1.1190 per euro as of 11:33 a.m. in London, from as low as $1.3993 in May 2014. While the greenback has declined 6 per cent since mid-March, its broader gain is a boon to Americans making a transatlantic voyage - and analysts see the exchange rate getting even more favourable through next year, forecasting a euro drop to $1.07 by the end of next year.

Michael DuCharme, head of currency strategy at Russell Investments Group in Seattle, and his wife travelled to Rome and Italy's Amalfi coast last month, where they marvelled at the towering columns of the Colosseum and the intricate tile mosaics in the ancient ruins of Pompeii.

The couple found bargains everywhere: a reasonably-priced hotel near the ruins of the ancient forum, affordable leather goods for their kids and cheap pizza and pasta.

"I was just stunned at the prices in euros," DuCharme said in a phone interview Wednesday. "We would just look at each other and shake our heads and say 'this is so much cheaper than back home.'"

He's already eyeing another trip, next time to Normandy in France.

"If you're going to go to Europe, now's the time to go," DuCharme said.

The mightier dollar means U.S. residents are travelling abroad in bigger numbers and spending more when they arrive, said David Huether, senior vice president of research at the U.S. Travel Association, an industry group in Washington.

The Americans I meet keep things easy by simply thinking of one euro as one dollar...at dinner, that makes a bottle of fine wine rather than a carafe of house wine suddenly much more affordable.

travel author Rick Steves.

"The Americans I meet keep things easy by simply thinking of one euro as one dollar," Rick Steves, author of more than 50 European travel books, said in an e-mail from Rome. "At dinner, that makes a bottle of fine wine rather than a carafe of house wine suddenly much more affordable," said Steves, who also hosts travel shows on public television and radio.

The currency benefits are evident even before travellers set off.

Greg Farmer, a tourist taking in Madrid's Museo del Prado art museum, said bargain prices tempted him to extend a family trip to two and a half weeks, including stops in Barcelona and Seville in Spain, as well as Lisbon.

"It makes a difference when you're planning your trip - looking for hotels and flights there's definitely better value for money," said Farmer, who lives in Washington.

Europe is the third-most popular region for U.S. citizens heading abroad after Mexico and Canada, accounting for 17 per cent of traffic in 2014, Commerce Department data show. The number of American trips to Europe rose 4.2 per cent to 840,187 in March versus a year earlier.

That's helping to provide an infusion of cash into Europe's economy. The region's tourism earnings rose to $509 billion in 2014, up 3 percent from the previous year, according to the United Nations World Tourism Organization.

Tour companies are expanding offerings and giving discounts in response to a surge in bookings and early summer travel requests, according to the U.S. Tour Operators Association.

Mayflower Tours is advertising two-for-one airfare for an 11-day river cruise through the south of France, and even luxury tour operator Abercrombie & Kent is discounting some European packages by as much as $800 a person.

Holidaymakers are most likely to flex their strong dollars by splurging on fancy meals, taking taxis or shopping, according to Gene Openshaw, who co-authored several of Steves' European guidebooks. U.S. tourists will also pay up for special experiences such as a cooking class in Burgundy or a gondola ride in Venice.

"Even if people aren't rich, they'll spend a little more on serendipity," Openshaw said by phone from Edmonds, Washington. "Everyone's going to climb the Eiffel Tower, but if you've got that extra money, you might celebrate with a flute of champagne that you buy from that tiny takeout window at the top."

- Bloomberg