Under the support of high interest rates and a strong economy, the U.S. dollar has been strengthening, leading many Americans facing high groceries and food prices due to inflation to travel to Asia, South America, and Eastern Europe for vacations. They are enjoying gourmet cuisine at prices unmatched domestically and even dining at Michelin-starred restaurants.
According to The Wall Street Journal, Americans are taking advantage of the strong dollar to enjoy what they call “inflation vacations” overseas.
During the Memorial Day long weekend, millions of Americans have been flying and driving to celebrate the start of the summer season in 2024. A consumer travel survey by Bank of America shows that 72% of respondents are planning trips, with 36% having already made plans. The survey indicates that compared to older generations, more young Americans are planning international travel and are willing to spend more on long-distance trips.
From January to April, American households traveling to Japan, South Korea, Switzerland, Colombia, and Costa Rica have had the highest expenses using Bank of America cards. In April, the highest proportion of personal international expenditures through Bank of America was in Europe (32%), followed by Canada and Mexico (23%), and then the Caribbean (13%).
Even among respondents with annual incomes below $75,000, over 60% of Americans stated they plan to travel this summer. For those with incomes exceeding $150,000, this figure rises to over 80%.
As reported by The Wall Street Journal on May 27, 44-year-old Cecile Blot was surprised to find dining prices remarkably cheap during her trip to Argentina in February. She and her mother had dinner at a restaurant in Buenos Aires, ordering a few appetizers, a steak, ribs, dessert, and a bottle of wine for about $60.
Overall, the dollar index has risen about 4% since the beginning of the year, with the dollar gaining about 2% against the euro and over 11% against the yen. This means the dollar has particularly strengthened against the Japanese yen and the Argentine peso, with Japan seeing its yen exchange rate at the lowest level in decades and Argentina’s peso nearing historic lows. Other popular travel destinations where the dollar can now purchase more goods include Hungary, South Korea, Thailand, Brazil, and Canada.
Twenty-year-old Kai Heiser typically stays in budget hotels when traveling abroad. However, during April—a famous cherry blossom season—he spent nearly a month in Japan, opting for higher-rated hotel options as spending a few extra dollars greatly improved his comfort.
“Cost is something I only think about afterward,” said Heiser from California.
Data from the Japan National Tourism Organization (JNTO) shows that nearly 800,000 Americans visited Japan in the first four months of this year, breaking last year’s record. In April, nearly 230,000 Americans traveled to Japan, accounting for 7.5% of total visitors. Over the past year, the dollar’s value in Japan has increased by over 10%, currently around 156 yen to the dollar.
According to JNTO, the average spending of American visitors to Japan who stay for more than 9 days is about $2,100.
Heiser revealed that he spent around $2,500 on this trip. He noted that the strong dollar allowed him to freely explore temples and shrines in Japan, as entrance fees usually do not exceed $5.
During her visit to Budapest, Hungary, 43-year-old Washington D.C. resident Jacqlyn Schneider dined at Felix Kitchen & Bar, a Michelin-recommended restaurant known for its castle-like exterior and riverside location, with her sister.
Schneider mentioned that the cost of this meal may have been half of what it used to be.
Budapest has been praised as one of the most affordable travel destinations in Europe, now even more appealing to Americans as the exchange rate is near its best level in decades. Currently, one U.S. dollar exchanges for nearly 360 Hungarian forints, slightly lower than the peak in 2022 but still up over 20% since 2019.
While traveling through Argentina, Blot, now en route to Antarctica, made stops in Buenos Aires and Ushuaia, the southernmost city in South America. Besides affordable steak dinners, she went on a tango tour in the Argentine capital and explored Tierra del Fuego National Park in the south.