-- The greenback is making a comeback in many countries, boosting buying power for Americans who still have discretionary income and an urge to travel.
Currencies around the globe such as the South African rand, Icelandic krona and Korean won have fallen sharply vs. the American dollar in recent weeks. That makes vacations up to 50% cheaper than even a few months ago.
"Every day a client comes in (asking), 'Give me an example of where my dollar is going to go furthest,' " says John Clifford of the luxury travel agency InternationalTravelManagement.com.
Countries where the U.S. dollar is suddenly buying more:
• Iceland. Teetering on bankruptcy, the North Atlantic island-nation recently began promoting winter air and hotel deals to lure U.S. tourists. The krona lost nearly half its value against the U.S. dollar in only three months, and "it's vital for Iceland to keep tourists coming," says Einar Gustavsson of the Iceland Tourist Board. Since the launch, Icelandair's bookings from the USA for October to December jumped 72% over 2007's levels for the same period, he says.
In cosmopolitan Reykjavik, Americans can now buy a 21/2-hour spa treatment at the luxury Laugar Spa for about $65, almost half of last year's price. A night at Hotel Borg — a newly renovated art-deco gem in the heart of downtown — runs about $160, about a third less.
• Costa Rica. With the U.S. dollar worth about 10% more than a year ago, more clients — especially families — are booking Costa Rica, Clifford says. Rates at the luxury Tabacón Grand Spa Thermal Resort are about $185 vs. about $230 last year.
• South Africa. With the dollar buying 43% more than in August, Margie Jordan, owner of ASAP Travel in Jacksonville, says some clients who were considering basic safari vacations are now considering upgrading. Example: A two-night stay at the upscale Mateya Safari Lodge now costs about $330 a night, down from about $500 last year, she says.
Because prime season for safaris is in the summer (South Africa's winter), Jordan is advising clients to book next year's trip now and lock in the cheap rate in case the currency snaps back.
Despite the benefits of visiting a country with a weak currency, Jennifer Fuller of consulting firm Global Insight says it won't be enough to offset effects of the sour U.S. economy. She expects international travel levels this year to be weaker than last year.