Affordable destinations

BY ELLEN CREAGER | Detroit Free Press

6:50 PM EDT, July 27, 2007

Poor measly dollar. It's shriveling against the euro. It's a weakling against the British pound. It's even starting to waver against the Indian rupee and the Thai baht.

Is there anyplace in the world that the dollar is still almighty? Sure. You just have to know where to go.

"Rural Spain and Portugal are not so bad, but the rest of Western Europe is so expensive now; everyone I talk to is just flabbergasted at how much they are spending. They are not prepared for the actual shock of spending $100 on lunch," says Tim Leffel, the Nashville-based author of "The World's Cheapest Destinations" (Booklocker, $13.95). Instead of Europe, look in our own hemisphere, he urges.

"I advise so many people to go to Latin America," he says. "It is easy to get there, there is a steady exchange rate, there is almost no time change, and it is a bargain." Places like Nicaragua, El Salvador, Ecuador and Argentina all are cheap for Americans. El Salvador and Ecuador actually use the dollar as their official currency, plus the cost of living is low. A taxi ride that might cost $30 in London may cost just $3 in Nicaragua.

Leffel also says Mexico can be a bargain if you get away from the big tourist areas. He also likes the Middle East; value spots are Morocco, Jordan and Egypt.

Bruce Beattie, owner of Foreign Currency Exchange Services in Birmingham, Mich., is seeing a lot of movement among his customers to Asia, where they are finding value in Vietnam, Laos, Bali (Indonesia), Cambodia, Malaysia and Nepal. That does not mean all spots in Asia are cheap.

"Hong Kong is really pricey now," he says. "I had a customer who came back and said they couldn't afford to buy anything." Japan is also expensive, but the yen is at a four-year low against the dollar, which helps American tourists. However, a recent rise in the Thai baht against the dollar (now 31 baht equals $1, down from 42 in 2005) means prices are rising. So far, high-end travelers will still find the country a bargain. But travelers on a shoestring budget will likely feel the pinch, Leffel says.

Dollar-wise spots

Romania, Bulgaria, Turkey and Croatia: These nations are a good deal -- for now. All may someday adopt the euro as members of the European Union.

"Romania just joined the EU in January. It is only a matter of time before their prices rise," Leffel says. Bulgaria also just joined; Turkey and Croatia have applied.

China: Economists estimate the Chinese yuan is about 40 percent undervalued against world currencies, including the dollar, which makes its products ultra cheap abroad. The good news: It also makes visiting China still incredibly cheap for tourists. "For now, the hotel building boom and the huge spike in demand are offsetting each other," Leffel says. "Their currency is still the same it's been for years [now about 7.5 yuan for each dollar]. But the 2008 Olympics are coming, so that will drive up prices." So might international pressure on China to raise the value of the yuan.

Affordable still

Some destinations, while not cheap, have prices similar to the United States. South Africa: "It's actually gotten better in the last six months because their exchange rate has gone down [7 rand for $1]," Leffel said. "You are not going to get sticker shock anywhere in Africa."

Israel: Lack of tourists makes it affordable.

New Zealand: Not as expensive as Australia for Americans.

Getting pricier

Canada: The Canadian dollar has risen dramatically against American currency. Five years ago, you could get a whopping $1.50 Canadian for $1 U.S. and buy a lot as a tourist in Canada. Now, the two nations' currencies are nearly identical in value, Beattie says. "The combination of that, plus the fact they got rid of the GST [Goods and Services Tax] visitor tax rebate, makes Canada more expensive," he says.

India: The rupee has risen more than 8 percent against the dollar this year (you now get only 40 rupees each $1 instead of 44), but the main thing driving higher tourist prices is demand. "It's getting more expensive at the top end," Leffel says. "In the budget and mid-range, you are fine. But it's not unheard of to pay $350 a night at a good hotel in Bombay or Delhi."

Poland, Czech Republic and Hungary: Though they don't yet use the euro, these countries are so popular with European tourists that prices in Krakow, Prague and Budapest have risen -- not to Western European levels, but a lot. Leffel's advice is to get out of the big cities, because the countryside in these nations is still very affordable.

Costa Rica: Ultra popular eco tourism spot in Central America is not expensive by European standards, but "they are a victim of their own success," Leffel says. "But you still get a lot for your money there."

Australia: The Australian dollar hit an 18-year high against the U.S. dollar last month, making a trip Down Under an increasingly upper-crust pursuit.