The Falling Dollar: What to do

In Gemütlichkeit's 17 years there have been four periods in which the U.S. dollar has dropped quickly and significantly against European currencies—1988, 1991, 1995 and right now. In the past year or so it has slipped some 30% against the euro. And the Swiss franc, a dear currency anytime, has risen about 27% against the dollar. This means that a 100 euro/$86 hotel room in April of 2002 now goes for about $118 and what was a CHF 200/$115 hotel room in Switzerland is now $155.

Has the dollar hit bottom? Some experts think it has not. At its low point in the mid-90s the dollar was worth about 1.37 German Mark and 1.09 Swiss francs. Today, a single greenback gets you 1.28 Swiss francs and would fetch about 1.65 Deutsche Mark if that currency were still around. Some say the dollar will stabilize at 80% of the euro. If they are right that 100 euro hotel room will cost $125.

One sign we may be near the end of a falling dollar is the media. They have just begun their usual bleat about how expensive Europe is, and it was very near the end of each of the last three dollar swan dives that assignment editors began sending reporters to the streets of Rome and Paris to find Iowans and Oregonians buying $10 cokes and $12 espressos.

Though the media is absolutely correct, traveling in Europe has gotten more expensive in the last few months, the sound bites never tell the whole story. For example, a chunk of almost every European vacation budget is airfare and those are about as cheap as they've ever been. Rail passes have remained pretty stable for the past three years (but watch out in 2004 if the euro stays strong), and you can still rent a four-door, air-conditioned car in Germany for slightly less than $30 per day including tax.

That leaves food and lodging. Let's talk first about some tactics to save money on hotel bookings.

Head for the Countryside

Youngest son Andy, his wife Margaret, and 18-month-old daughter Amanda, left at the end of May on a two-week trip to Germany. At Gasthof-Pension Hofmann, (Altenstein, 96126 Maroldsweisach, tel. +49/09535 391, fax 1441) in the tiny but interesting town of Altenstein, near Coburg, they'll stay several days and pay €21 ($25) per night per adult (kids under six free) for a room with private bath, a small sitting area with couch, and a balcony with a spectacular view. The price includes a cooked-to-order breakfast. This is their second time at the hotel, and it's an easy drive to such interesting destinations as Bamberg, Coburg and even Nürnberg.

Find the "Bib Hotels"

A day or so prior to their departure from the U.S., they asked about a first-night hotel. Out came the Michelin Red Guide for Germany. On map page #5 in the front of the book we noted one of the new "Bib Hotel" symbols spotted next to the town of Bad Soden Salmünster, 61 km east-northeast of the Frankfurt Airport. Photos on the website of the Berghotel Berlin (Parkstrasse 8, 63628 Bad Soden-Salmünster, Tel. +49/06056/91220, fax 91 22 55) were convincing enough to email for a one-night reservation. In a few hours came a €75 ($89) quote for a double room with baby bed. Nobody even asked for a credit card.

This story illustrates a couple of ways to save money on hotels in Europe. The first is to spend more time outside major cities where prices are much lower. The German and Austrian countrysides abound with inexpensive accommodations and one way to locate them in Germany is to do as Andy did, use the new "Bib Hotel" symbol in Michelin to find inexpensive hotels the guides say offer "a warm welcome and good standards of comfort and service."

Stay Put

Another dollar-saving tactic is to stay longer in one place. Most country hotels discount for multiple night stays. The previously-mentioned Gasthof-Pension Hofmann offers a super seven-night deal that includes breakfast and dinner for about $425 per week. That's a little over $30 per night, per person.

Typical of longer-stay deals in Austria is the resort hotel St. Peter in Seefeld, which offers seven nights for the price of six, a 14% saving.

Lower Expectations

Next, you might consider stepping down in class. Those accustomed to five-star luxury may not care that hotel rooms in Europe are 30% more expensive than they were a year ago. On the other hand they will discover that some three and four-star hotels are just as luxurious as those in the five-star category - and often have more charm. (Remember, the stars have to do with services - availability of room service, whether or not the hotel has doormen, etc. - and not quality.) In Berlin, for example, the Hotel Adlon, a five-star with 24-hour room service, uniformed doormen, and plenty of officious desk clerks, the least expensive rack-rate double room is €350 ($417). At the more architectural and decoratively interesting, Brandenburger Hof, an elegant, very upscale four-star hotel, rack-rate doubles start at €240 ($286). It works just the same at the other end of the scale. In Vienna, we love the three-star Kaiserin Elisabeth in the very heart of town. Its double rooms this summer are €200 ($238). But equally well-located in the center is the Pension Aviano, where rooms are just as large and only a little less well-appointed. There, high season double room prices range from €122 to €145 ($145-$173).

Shop Hard

Don't fail to get a price directly from the hotel. It's become a world of Internet and independent toll-free booking services, but sometimes the best deals are at the source. And, since some hotels use their website to fill beds on slow nights, always check the hotel's own website (as opposed to booking service sites).

Saving on meals while traveling is pretty much common sense: eat where the locals do, buy the makings of a picnic lunch at a grocery store, and stay away from restaurants where you get more than one set of silverware.

The dollar will return, but in the meantime, a few itinerary adjustments, some prudent buying and Europe is still affordable.- RHB

June 2003