With an exchange rate of about $1.21 to purchase a euro, the euro is on sale. Will that equate to lower prices in Paris or Italy? With oil prices hovering at about $60 a barrel, will that show in reduced air fares? Let's take a look and see:
Lower Currency Prices: Yes, things should be cheaper in Paris. That 7 night stay in a 3-star hotel should be about 18% less than last year. So if you spent $2,000 for a hotel, this year it will be about $1,650. Another consideration is that as things get cheaper for Americans, they get more expensive for Europeans as their currency falls. Expect to see more "deals" to attract lodging customers. With lower currency rates expect to find ticket prices, food, and other expenses to be effectively lower.
Airfares: Unfortunately, I expect airfares to INCREASE this year despite the strong dollar and lower fuel costs. As the economy gets better in the U.S., more people will travel and the law of supply and demand will take over. Airlines have done a good job in limiting the number of seats offered on planes. People will pay more and airlines will make bigger profits. However, I would not be surprised to see some discount airlines pop up, but don't expect that this summer.
For more information on my small group tours to Italy, Paris, Peru, Ireland, and Norway, see www.travelingprofessor.com