Falling Australian dollar travelling tips

If you're planning a trip overseas and you're nervous about what your dollar might buy  you're not alone among your fellow Australian travellers. And you could also be forgiven for thinking that the days of living large with the Aussie dollar in your pocket are over. But are they?

A year ago our dollar was worth 89 cents US. Today that same dollar will buy just  77 US cents at the time of publication. While the performance of our dollar against the greenback gets the headlines, it's not all bad news. Against the euro the Aussie dollar gets a B-plus, currently trading at 67 euro cents to our dollar, which is about one cent up from this time last year. Against the British pound there's a drop of about two pence to the dollar and against a broad spectrum of Asian currencies the picture is much the same – a slight drop, but nothing catastrophic.

It's the rise in the value of the US dollar that makes our own look threadbare, and that affects even those travellers who are not heading to the US because many of the goods and services that go into the cost of a holiday  – from airline fuel to car hire to many hotel prices – are reckoned in the US currency. The answer is not to cancel but to travel smarter. Choose the right destination and a few cash-stretching strategies and you'll put your holiday dollar on steroids.

Where our dollar goes from here depends largely on commodity prices and what the Reserve Bank does with interest rates. Some financial gurus are tipping a fall to around 75 US cents, but there's more gut feeling than science in these estimates. One thing they all agree on, the Aussie dollar is not likely to rebound against any of the major world currencies, and therefore it makes sense to pay for your travels at today's prices. Book air tickets, hotels and tours now and you'll avoid the possibility of higher costs later on. In the meantime, here's where to go to drive your dollar further

EUROPE

The Aussie dollar has held up relatively well against the euro, and much better than against most other currencies. If you're thinking of a holiday in France, Italy or anywhere else in the euro zone, stay the  course, the hip-pocket pain won't be any greater than it was a year ago.

Outside the euro zone, our dollar is worth more in some cases over the past 12 months, up against the Croatian kuna, the Polish zloty and the Czech koruna, but down by about 5 per cent against the Turkish lira. These non-euro countries are the standouts for anyone who wants to experience Europe at low cost, but Russia is the absolute winner in the bargain travel department.

Sanctions imposed by Europe and America have taken a big bite out of the Russian currency and the Aussie dollar now buys 50 per cent more roubles than it did a year ago. According to the experts at Sydney's Eastern Europe Travel Bureau, the best deals are in the price of four  and five-star hotel rooms, particularly those that cater to business traffic, which has largely evaporated following the Russian-Ukraine crisis.   Travel agents are reporting luxury hotel rooms at three-star prices, and selective bargains  across the board in the price of sightseeing tours, dining, rail journeys and also in river cruises.

ASIA

Against the currencies of Thailand, Indonesia, China, Singapore, India and Vietnam, the Aussie dollar now fetches at least 6 per cent less than it did a year ago. Worst of all is Thailand, where the dollar has fallen by 10 per cent against the baht. Even so, the price of hotel rooms, transport, shopping, dining and especially spa and beauty treatments throughout Southeast Asia are still outstanding value for the Aussie traveller. 

In Japan, the dollar has gone the other way, now buying almost 5 per cent more yen than at the start of 2014. While Japan is not a cheap destination, it's one of the connoisseur experiences of world travel, and good value for those who choose to eat and sleep local style.

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THE PACIFIC

Our dollar is down across most of the Pacific islands, by 4 per cent against the Fiji dollar and 7 per cent in the case of Vanuatu's vatu. The exception is the CFP franc, the currency used in New Caledonia and Tahiti, where the dollar is now worth 4 per cent more than it was a year ago. 

The dollar surged against the New Zealand currency late in 2014 but it's since lapsed to about $NZ1.03, nudging close to parity, and as low as it's been at any time over the past 10 years. New Zealand draws more Aussie travellers than any other country, which means plenty of competition among hotels and tour operators, and there are some great packages that will put the juice in your holiday dollars. You'll drive your money further if you stick to just one island.

THE AMERICAS

That Starbucks iced hazelnut macchiato in LA, the price of a ride on the Big Thunder Mountain Railroad at Florida's Walt Disney World and a room at The Venetian in Las Vegas will all cost you more this year. Our dollar has slumped 10 per cent against the US currency. 

There are still plenty of great package holiday deals around and this is the way to help keep a lid on costs if you're looking to vacation in the hot spots of California, the American west, New York, New England or Florida. Our dollar traded at just above parity with the Canadian dollar for much of 2014 but it now sits at around 94 Canadian cents. Still short of its value a year ago, but not nearly as bad as against the US dollar, which might make Canada a more attractive option. 

South of the border, our dollar buys more local currency in the most popular destinations, namely Mexico, Argentina, Brazil and Chile, although inflation throughout Central and South America means that you'll get no more value for your dollars. Against Peru's nuevo sol the dollar is slightly weaker.

AUSTRALIA

This year may be a good year to take a break right here at home. The dollar in your pocket is still a dollar, just as it was a year ago, you don't need a passport or visa, there's no immigration queue or long-haul flight, no worries about where to access your cash and you can use data services with your regular service provider without fear.

TOP 20 ALL-TIME MONEY SAVER TIPS

1. Dinners are typically more expensive than lunches. If you eat your main meal in the middle of the day and snack for dinner, you'll save.

2. Driving overseas? A GPS is essential, but include it in the price of your car rental and it will add around $10 a  day to the cost. If you're hiring for a week or more, download the relevant maps for your own in-car device or buy a GPS at your destination. Better still, buy  a GPS system for your smartphone or tablet from Sygic (sygic.com), which gives you maps with voice prompts at a reasonable price, without expensive global roaming downloads.

3. An apartment is a great money saver for families on the go, and you can save a heap on meal costs.

4. Unless you have a local sim card, do not use global roaming to post that selfie to Facebook or check your email when you're overseas, the charge for using data services away from home will kill your happy holiday memories. If your hotel offers free Wi-Fi  use that instead, or go to a cafe that offers Wi-Fi.

5. Do not eat at tourist hot spots. Look for where the locals are dining and you'll eat for less, and probably better – but be prepared to bend the rules. A drink at a cafe in St Mark's Square in Venice is an essential travel experience.

6. Prepaid money cards offer security and convenience. They also allow you to lock in the value of the Aussie dollar at today's rates, but some come with high fees, especially if you withdraw funds in a non-major currency such as Thai baht or Indonesian rupiah. Rather than putting funds into a prepaid travel money card, a fee-free debit card will often be a better option. Citibank Plus Visa debit card has no account keeping  fees, no international transaction or currency conversion fees and no ATM fees. The Bankwest Zero Platinum MasterCard has no annual fees or foreign transaction fees.

7. Collecting your hire car from an airport terminal is almost always going to cost more than hiring from a nearby city office of the same car-hire company. Take a cab from the airport to the closest car-hire outlet and you'll probably save heaps, and you can return it at the airport with no extra charge.

8. Flying to Europe and looking for a bargain basement fare? You'll probably find it cheaper if you book sector-by-sector. For example book a return flight to Singapore with a low-cost carrier, then make another return booking from Singapore to your final destination. One drawback – you might have to collect your baggage in Singapore and check in for your next flight, so allow plenty of time between flights.

9. Tropical island resorts can work wonders with your love life, but there is no possibility of dining out – and food and drinks prices are typically high.

10. Rather than lunch in a cafe or restaurant, buy supplies from a local grocer or market, head for the nearest park or piazza and picnic.

11. Cruise ships often have late-breaking special deals as they scramble to fill empty cabins. Check for special deals on the websites of Cruising Express or Cruiseco.

12. If your hotel or cruise ship offers a loyalty program, join up. It's free, and members often receive valuable benefits that apply immediately.

13. Rather than buying travel insurance for each individual trip, an annual travel insurance policy is a money saver if you travel overseas twice or more per year.

14 Big-ship cruising is one of the best money-savers around. Accommodation costs, meals and entertainment are prepaid, drinks are cheap and if you steer clear of the casino and the shops you can live like royalty at a pauper's price.

15. Flights and hotel prices are cheaper if you travel in the shoulder season, with the added bonuses that you'll avoid the worst of the crowds and probably pay less for accommodation. Use a flight search engine such as Momondo (momondo.com.au) that gives you day-by-day prices.

16. If you need to transfer money overseas to pay for accommodation, use a service such as Currency Fair, which offers an excellent rate of exchange and charges lower fees than any bank.

17. It's easy to get excited by the glittering world of duty-free shopping when you're stuck in an airport terminal between flights but airport shops are expensive real estate, and their wares are not necessarily a bargain. Make sure you know the price of the same item back home before you lay down your credit card.

18. Mineral water always comes with a price tag, but tap water is free, provided you're somewhere that it's safe.

19. In Europe, drink your coffee standing up. You'll pay more if a waiter serves you at a table rather than ordering at the bar but be prepared to sit and watch the world go by when you're somewhere special.

20. Want to swap the place you call home for a villa on the French Riviera,  without a single cent changing hands? House Swap Holidays (houseswapholidays.com.au) has houses around the globe, and membership is cheap.

WHAT THE  EXPERTS SAY

Travel industry leaders respond to the question, "Are you seeing any impact from the falling Aussie dollar?", and pass on their travel tips.

Tom Walley, executive general manager, Flight Centre Australia

Impact: It's surprising but a dropping dollar really doesn't impact on the number of people buying flights. We looked back over 10 years of Flight Centre bookings and we couldn't find a link between the value of the dollar and the number of people travelling overseas. What does happen though is that people look for cheaper options on the ground – less expensive hotels, cheaper hire cars. One destination that people turn to in a big way is Bali.

Hot tip: I'm a big fan of the Cash Passport. You can lock in the exchange rate before you go so you know exactly what  you've got, and it's a multi-currency card so you can use it to withdraw funds just about anywhere.

Matt Cameron-Smith, managing director, Trafalgar Tours

Impact: It makes the fixed-price holidays that Trafalgar offers very attractive. When people buy an all-inclusive guided tour they know they've paid for just about everything in advance, and at a very good rate. They can sit back, relax and enjoy the experience, which is what a holiday is all about.

Hot tip: Rather than using your hotel's laundry service, talk to your travel director and ask where the nearest laundry is. They'll probably do a whole bag for just a few dollars.

Sacha Bunnik, operations director, Bunnik Tours

Impact: We've seen no effect at all. In fact, the week before Christmas was our busiest ever. But I think people are looking for real value and that's one of the strengths of the tours we offer. Also we're lucky in that our dollar really hasn't been greatly affected in the areas where we operate most of our tours. In Japan, up against the yen, the dollar is stronger than it has been for many years.

Hot tip: If breakfast isn't included in your hotel rate, head for a cafe outside as you'll never eat enough to get your money's worth from the hotel breakfast buffet.

Helen Wong, managing director, Helen Wong's Tours

Impact: The drop in the dollar against the currencies of China, Vietnam and the US has pushed tour prices higher, but the effect on travellers won't be clear until February, when the festive holiday season ends. The Australian dollar won't improve against major currencies so pay for your holiday early.

Hot tip: Take a package tour. Tour operators buy in volume and that gives us great bargaining power, and big savings for travellers. Also, very important, look for special discounts that will be appearing in the market over the next few  weeks, there will be some great bargains.

Claudia Rossi Hudson, managing director, Mary Rossi Travel

Impact:  There's not really been any change. At the high end of the market the crucial issue that affects travel plans is not so much the value of the dollar as how well the stock market has been doing. What we are hearing though is more and more is clients looking to holiday in Australia, but that's more to do with the stress of long-haul air travel rather than what the dollar buys overseas.

Hot tip: Buy your foreign exchange before you go. Load it onto a multi-currency cash card and you won't have any worries about accessing cash, shopping or paying hotel bills when you're overseas.

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