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The dollar and the euro are equal for the first time in 20 years: What that means for summer travel

July 12, 2022
5 min read
Travelex currency exchange
The dollar and the euro are equal for the first time in 20 years: What that means for summer travel
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Editor’s note: This post has been updated with new information.


Trying to plan a European vacation but worried about ever-increasing travel prices? We have good news for you: For the first time in 20 years, the dollar is at parity with the euro.

At press time the exchange rate is $1 = 1 euro.

With the strong dollar to the euro exchange, Americans will see a nearly 15% discount on purchases compared to the same time last year when the exchange rate was $1= 1.19 euro, and a 12% discount since the beginning of the year when the $1 = 1.13 euro.

That means once you arrive in Paris, Amsterdam, Rome or any other city in the 19-country European Union, you’ll be able to make purchases without running conversion charts in your head or worrying about the built-in markup on everything.

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If you're wondering why the euro is losing value, according to a report from Reuters, a recession looms across Europe — the result of “Russia’s move to cut off gas supplies to Bulgaria and Poland” and the fear of gas restrictions throughout the rest of Europe.

That’s coupled with “the twin headwinds of a surging dollar and sweeping COVID-linked lockdowns in China, a major market for bloc exports.”

The dollar is expected to continue to increase in value against the euro.

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This exchange rate was last seen nearly 20 years ago, in December 2002, and it's good news for anyone planning a trip to Europe this summer, according to Leslie Overton, the director of travel operations at travel advisor consortium Fora.

“It would be difficult for there to be more interest in Europe than there is right now,” said Overton.

She also noted that while summer is always a popular time for Americans to visit Europe, it feels “more urgent now” with travelers eager to return to pre-pandemic travel.

The problem? Although interest is high, affordable hotel availability isn’t.

This is because some hotels remain closed after the pandemic and some properties are facing staffing shortages. There’s also an overall surge in interest, making everything seem “tight,” according to Overton.

Recent hotel data backs up this trend, with hotels in Europe the last week in June performing 11% better than the same time in 2019, according to data from hospitality analytics firm Smith Travel Research (STR). The figures were also a nearly 3% increase from the prior week.

The silver lining is the advantageous exchange rate, Overton said.

“Travelers who had been on the fence about pulling the trigger on trips have been suddenly ready to commit after seeing parity come into view,” she said. “I had a client call me at home last night and say, ‘I want to pay for this right now!’ in case the exchange rate goes back up.”

Overton added that within her company’s advisor pool, there are always clients looking for rooms in the $200 to $300 range in Paris, which wouldn’t have been possible a few months ago but can actually happen now given that exchange rate.

“My advice is for anyone who’s been thinking ‘maybe’ about booking hotels in Europe this summer is take advantage of the exchange rate and lock it in, and don’t miss this opportunity,” Overton said.

One note from TPG: It’s always best to find a hotel deal that will let you cancel and rebook instead of locking you into a nonrefundable hotel rate.

Related: Traveling to Europe this summer? Here’s what to expect

The strong dollar also bodes well for shoppers who would gain even more purchasing power if the euro continues its devaluation.

One sweet spot, according to PurseBop: luxury goods from companies such as Chanel and Louis Vuitton. These internationally popular brands use what the site calls a ‘price harmonization strategy’ that makes prices equal across the globe.

Here’s an example from PurseBop: Chanel priced a medium classic flap bag at 7,800 euros and $8,800 in February 2022, when the exchange rate was 1.13 euros to $1. When converted, the euro price came to $8,814, about the same as the U.S. dollar price.

At press time in early July, that euro price hadn’t been adjusted — which means U.S. shoppers buying that bag in Europe, for now, will receive the equivalent of a $1,000 discount.

Of course, these luxury companies could adjust their pricing soon to reflect the changing euro value.

However, if you’re headed to Europe in the near future and are in the market for an investment bag or designer goods, now just might be the time to crunch the numbers — and get shopping.

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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5XGet 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com
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    The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.

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  • Annual Fee

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  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Good, Excellent

Why We Chose It

It's hard to find a card that competes with the mile-long list of benefits that come with the Amex Business Platinum. While it's certainly not the card for the average consumer, a business owner with tons of expenses -- especially related to travel -- will find this card incredibly valuable. This card is similar to the consumer version that Amex offers, but with more business-oriented perks around statement credits and earning rates that are a better fit for business owners.

Pros

  • An up to $100 credit for Global Entry or TSA PreCheck application fee every four to five years
  • Up to $400 annual credit for eligible U.S. Dell purchases (enrollment required)
  • Gold status at Marriott and Hilton hotels (enrollment required)
  • Access to the Fine Hotels & Resorts program and Hotel Collection
  • Extended warranty protection
  • International Airline Program and Cruise Privileges Program

Cons

  • Steep annual fee
  • Difficulty meeting $15,000 welcome offer for smaller businesses
  • Limited high-bonus categories outside of travel
  • The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.
  • Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases.
  • Earn 1.5X points (that’s an extra half point per dollar) on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
  • Unlock over $1,000 in annual statement credits on a curation of business purchases, including select purchases made with Dell Technologies, Indeed, Adobe, and U.S. wireless service providers.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year for checked baggage fees, lounge day passes, and more at one selected airline.
  • $189 CLEAR® Credit: Use your Card and get up to $189 back per year on your CLEAR® membership. CLEAR® is available at more than 50 U.S. airports and stadiums.
  • The American Express Global Lounge Collection® can provide an escape at the airport. With more than 1,400 airport lounges across 140 countries and counting, you have more lounge location options than any other credit card on the market as of 9/2021.
  • $695 Annual Fee.
  • Terms Apply.