Anyone with travel plans might be feeling glum watching the finance news at the moment. The Aussie dollar has been slipping against the US dollar, getting weaker and weaker, and those overseas holidays we are so desperate for seem to be more expensive than ever.
But, behind the headlines, things are not as bad as they seem.
While the Aussie is turning into fewer and fewer US dollars, remember - there’s more than one other currency in the world.
The Finance news likes to focus on the greenback, which is known as the world’s reserve currency, but there are still plenty of currencies against which the Aussie dollar has got stronger, not weaker.
That makes these countries cheaper to visit.
The following chart has two columns, one for countries where our dollar makes travel cheaper, and one for countries where our dollar has made travel more expensive (relative to January 2018).
Japan and Korea are top choices from an Aussie dollar perspective.
Japan’s borders are currently closed to anyone not on a guided tour, but that is changing. From September 7, more tourists will be let in, and tourists will not require guides. It’s ramen time.
Our dollar has been rising fast against Japan’s yen. One Aussie dollar buys 93 yen, which means anything you find in a 200-yen shop costs roughly 2 dollars.
Booking now could win you a cheap stay in Tokyo, but of course currencies can turn fast, so locking in prices in Aussie dollars, or paying in advance could be a good option.
Right now a one-week ski pass in Niseko costs less than it did in 2018, in Aussie dollar terms, down from $558 to $536. Talk about beating inflation.
In Australia, a one-day ski pass at Thredbo is up about 40 per cent across the same period, from $125 to $179 a day. You start to see why Aussies are now more likely to visit Japan in winter than in cherry blossom season.
Japan was once one of our fastest-growing destinations, but just a few planeloads of Australians have travelled there recently, as the next chart shows.
Korea’s borders are open at the moment, with one restriction: travellers are required to take a PCR test within 24 hours of arriving. It costs about $75.
Korea has seen relatively few Aussie travellers, historically, but at the moment it is in our top-20 favourite travel destinations, way ahead of well-worn places like Hong Kong, China and Greece. Could be time to investigate Gangnam style yourself (Gangnam is a hipster part of central Seoul.)
South-East Asia is open for business, but the Aussie dollar is not going so well there. As the chart above shows, we are weaker against Thailand’s baht, Vietnam’s dong and Indonesia’s rupiah.
Of course, these are cheaper destinations overall than Korea or Japan, and the currency movement is not the only factor that determines the price of a holiday.
I recently got back from a trip to Thailand, and the lack of Chinese tourists out in the world is leaving Thai hotels pretty empty. It’s possible to find a great deal right now and the locals in the tourist areas are very happy to get some customers back.
Indonesia is also bouncing back strongly even though the AUD was in better shape against the rupiah back in 2018.
Looking beyond Asia, India is a bargain, and Europe is also on special. You get 69 euro cents for a dollar - the best it’s been in five years.
Even though the price of coffee in Europe is up from a nice round euro to 1.10, an espresso at a bar in Naples will still only cost you about $1.60 AUD. I promise you will not miss getting a paper cup with a plastic lid for $4.90 as you sip that liquid gold and listen to the barista chat to the locals.
While you’re in Europe, you may want to dodge Switzerland. The chocolate is good and the scenery is incredible but you’ll find more value looking at the same alps from the other side of the border.
Long ago, the Aussie dollar and the Swiss Franc were on par but, throughout the past decade, they outmuscled us currency-wise. Now, an Aussie dollar buys just a fraction of a franc.
In Geneva, you‘ll pay A$40 for a cheese fondue, “served with boiled potatoes”. It’s an overrated dish anyway, and terrible for the digestion.
There are much better options, and some of them have not been such good value for many years.