Budget Travel

Your membership includes:

  • Access to our exclusive booking platform with private rates.
  • Newsletters with weekend getaways, trip ideas, deals & tips.
  • Sweepstakes alerts and more...
  • Don’t have an account?Get a FREE trial membership today. No credit card needed. Sign up now.
  • FREE trial membership. No credit card needed. Limited time only. Already have an account? Log in here.
    By creating an account, you agree to our Terms of Service and have read and understood the Privacy Policy
Close banner

Dollar forecast for 2008

By Sean O'Neill
updated September 29, 2021

Today the dollar buys about half as much in 13 western European countries as it did in 2001. But it might regain some buying power soon.

Today, you need $1.48 to buy a euro. But within a year's time, you may only need $1.39—or roughly 6 percent less, say surveys of economic forecasters by the Federal Reserve Board. That's not much of a gain, but at least it's something.

Interestingly, U.S. hotels are slightly better off when the dollar is weak, not strong. Here's why:

On average, hotels earn somewhat more money when a cheaper dollar attracts more visitors to our shores and encourages more Americans to travel within the U.S. instead of abroad, say researchers at PricewaterhouseCoopers. The hotels that gain the most from a weak dollar are in Las Vegas, New York City, and San Francisco.

Why is the dollar dropping? You may have heard a sensational reason, namely, that fewer foreign banks, businesses, and governments are doing business in dollars. (In a classic example, a business in one country that buys a product from a business in another country may use dollars to do so, if it thinks that the dollar is a more convenient, stable currency than the local currencies.) Some U.S. analysts worry that if a critical mass of foreigners stop using the dollar—especially foreign banks that stockpile dollars as a way to guarantee of the value of their local currencies—large numbers of banks and countries will stop using the dollar. The value of the dollar could spiral downward, causing a variety of problems for Americans.

Luckily, whether or not such a situation could become a reality, it seems that only a relatively small number of foreigners are switching to the euro and other currencies right now. The Economist recently printed a handy chart to show this point. About two-thirds of the world's money is kept in dollars today, which is roughly the same stockpile as in the early 1990s—and far more than in the 1980s. The dollar's recent troubles have had to do with temporary problems, such as the cuts in U.S. interest rates, the mortgage-industry crisis, and the drop in the value of U.S. debt for foreign investors. These problems will sort themselves out within the next year or two, according to The Economist, The Wall Street Journal, and the Financial Times.

Is the dollar driving you out of Europe? How are exchange rates affecting your travel plans? And how are you keeping travel costs down? Feel free to post a comment below.

EARLIERThe 2008 Hotels Forecast: What budget-minded travelers can expect.

PHOTO BY AMagill via Flickr.

Keep reading

Holiday Inn gets a $1 billion new look

It may be the world's largest hotel revamp ever, involving 3,125 Holiday Inn hotels worldwide. The owner of the Holiday Inn brand, InterContinental Hotels Group, has warned its franchisees that if they don't freshen up their hotels, they will not be allowed to carry the Holiday Inn logo. The "motor lodge-style" look is out. Sleek exteriors are in, along with new decor, bedding, and lobbies. Every bathroom will get an improved shower head offering superior water pressure and a shower curtain with a curved rod. There'll be a new, business-like logo, too: The first batch of 150 hotels with the new look will appear mid next year. Changes will be rolled out elsewhere between then and early 2010. Holiday Inn can afford to make the changes because it's one of the world's most profitable hotel brands. In some parts of Asia, it is even treated as a luxury brand. The changes were the result of a survey of 18,000 customers. Among the complaints voiced were that front-desks looked too cluttered, and that the hotel exteriors weren't brightly lit. Customers also said that they prefer it when desk clerks address them by their name. These suggestions, among others, are being adopted.


Fingerprints may replace e-tickets

Air France has announced that it will start an experiment with "biometric boarding cards" this winter on its Paris-Amsterdam route. Passengers who volunteer will load a digital image of their index print onto an electronic chip card. They'll then be able to use the card to go through fast-track lanes at airport check-ins. An electronic gate will allow a passenger to walk through if it detects a match between the scan of a fingerprint in a computer database and the one on the card. If the tests with about 1,000 passengers are successful, the high-tech cards will be offered to nearly 15 percent of Air France customers. [via Agence France-Presse] Photo by Fazen. Find her portfolio on Flickr.


Virgin America on sale

Virgin America is offering a fare sale on these routes: between San Francisco and Los Angeles for $78 round trip, flying between Sept. 13 by Dec. 13; between Washington, D.C. and San Francisco, for $238, flying between Sept. 26 and Dec. 13; and between New York and your choice of L.A. or San Francisco for $258, flying between Sept. 13 and Dec. 13. Book at VirginAmerica.com. Fares must be booked by Sept. 6, 2007. Blackout dates between Nov. 16 through Nov. 26, 2007. Taxes of up to $36 are not included in the above fares. Related: Is Virgin America the best airline for budget travelers?


Continental makes a classy move

Continental Airlines said today that it will allow customers to change flights online if their flight is affected by disruptions, such as severe weather. Until now, passengers had to rebook themselves either by waiting on hold at 800/523-3273 to speak with an agent or wait in line at the airport. You can even waive change fees or handle other complex situations online, says the airline. At airports where wireless Internet is available, or for travelers who have Web-enabled phones and PDAs, this announcement is great news--and will hopefully inspire copycat moves by other airlines. In a summer of delays, it's nice to hear an airline actually do something--even something small--to improve the situation. Earlier: Kudos to Continental from Budget Travel editor Erik Torkells. Photo: Courtesy Alex S. on Flickr. (Creative Commons)