The chart below (and the accompanying article called “Let Economics Help Plan Your Summer Vacation“) appeared on my Twitter feed a few times last week. The graphic shows which countries are currently cheaper to visit based on both exchange rates and inflation. Currently, Americans can get the most bang for their bucks in Argentina, while Japan comes in dead last.
While a country’s exchange rate could be an important factor in travel planning, the “best bang for your buck” chart only tells part of the picture. It lets you know how your dollars can work for you when you’re in country, which affects things like hotel or lodging expenses, in-country travel, and food and souvenir purchases. However, there’s more to choosing where to go and getting the most from your travel dollars than just the current exchange and inflation rates
For example, who’s going on this trip? Argentina may give you a great exchange rate for your dollars right now, but is it just you going? You and your spouse? Are you bringing children along? How interested is everyone in visiting Argentina? How actually interested are you in visiting Argentina? Travel is a very personal experience. I have nothing against Argentina, but don’t think the best reason to visit someplace is just because it’s got a good exchange rate. Argentina and several of the countries on the top half are just not high on my list of places I want to experience. Move to the pink half of the list though and most of the countries are ones I and my family would be very interested in visiting. We would be very motivated to save in order to cover a less advantageous exchange rate.
How much will it cost to get you there? Argentina might give me the most for my American dollars right now, but getting there from here would literally wipe out any potential savings that good exchange rate would give me. Likewise, Japan might be at the bottom of the list right now, but I can find reasonable fares from here which would make my travel budget go a whole lot further. The difference between traveling from Kaua’i to South Africa (high on the green half) versus Japan, or to London, is currently around $700 per ticket. This doesn’t mean I don’t want to visit South Africa or London, but if I were picking a destination based on good exchange or inflation rates, the increase in ticket costs would potentially wipe out any benefits. Likewise, getting to Japan could be exorbitant for someone located somewhere else, and added on to the current exchange rate would make a trip there unaffordable.
How long does it take to get to your destination from where you live? I can get to Japan from Hawai’i, non-stop, in around 10 hours, New Zealand in about 13 hours. From here to Buenos Aires would take somewhere around 30 hours, which would frankly do me in, even if I could find an affordable fare (Lihue to London is 24 hours each way; Johannesburg is 36 hours going; 56 hours coming back!). If I were in my twenties or thirties, it might not faze me, but that many hours of travel time now would wipe out two or three days once I got to my destination because I’d need that much time to recover, again taking away or diminishing a good exchange rate benefit in country. Brett and I plan to make long journeys in the future, but they’ll have stopovers for rest and recuperation built in, both in time and in our budget. Always check how long it takes to get to your destination and back from where you live. Sometimes those good airfares are cheap for a reason. While shorter travel schedules can always be found, you will usually pay extra for them.
Finally, reflect on the reasons you want to visit a place. Why do you want to go? What do you plan to see and do when you’re there? Why do you want to see and do those things? I’m personally not one for going somewhere just to check it off some list, but I know that’s not true for everyone. We all have our own reasons for wanting to travel somewhere. Where I want to go and what I want to see has to do with my (and my family’s) interests and our own stories. I love visiting Japan not only because I have family there, but because I feel comfortable there. It’s safe, I can get around without a problem, I love the food and know how to eat cheaply when I’m there, where to find bargains, and so forth. I still always find or learn something new every time I go. The exchange rate barely factors into my plans at all.
Another country’s exchange and inflation rate is just one small part of choosing a location for a visit or vacation. Choose where to go because you’ve always wanted to go there, or because it’s piqued your interest, and because you can get there affordably and comfortably from where you are, not just because the dollar might be stronger there. Getting the “best bang for your buck” means looking at the whole travel picture.
And who knows? You might even decide you want to go back . . . again and again.