World's most expensive cities not so bad ... if you're Australian

The cities renowned as the world's most expensive aren't so expensive any more - as long as you have the benefit of coming from Australia, writes Tim Richards.

“ Shaken, not stirred.”

Sitting in the elegant cocktail bar of London's Edwardian-era Dukes Hotel in 2008, I had no idea how apt James Bond's famous line would soon seem.

I was there because of the boutique establishment's connection with the fictional secret agent. Novelist Ian Fleming used to hang out at the bar at Dukes, and it was here that he coined the cocktail preference which became an enduring part of 007's mystique.

But “shaken, not stirred” could also describe my reaction to the cocktail bill.

I'd just been on a one-person James Bond walking tour of Mayfair, conducted by freelance tour guide Simon Rodway. At our final stop, I'd impulsively offered to buy my guide a Vesper martini, invented by the secret agent in Casino Royale. Bond named it after the novel's love interest, Vesper Lynd, because “once you have tasted it, you won't drink anything else” (he really did know all the lines).

Dukes' version of the cocktail was memorable not only for its taste, but its presentation. Upon ordering, a white-jacketed Italian waiter appeared at our table with a wooden cart bearing giant frosted bottles of gin and vodka, along with small flasks holding Lillet wine and bitters. After masterful stirring (Bond would be shocked) and the placement of a slice of orange peel rather than lemon (shocked again), we had our Vespers.

They were bitter, strong, smooth… and extremely expensive at £18.50 each. In 2008, with the Australian dollar buying 48 pence, that worked out to $38.50 per cocktail. Ouch. I consoled myself that I was doing much better than I would have five years earlier when the dollar had been buying only 35p; at that rate, each Vesper would have cost $52.85.

At the other extreme is the exchange rate of today, currently hovering around 66p. Assuming the cocktail cost the same in pounds, that Vesper would now go for $28. That's still not cheap, but I've had cocktails in Sydney and Melbourne that cost almost as much as that, and no fancy Italian waiter to make them at my table.


To be an Australian traveller is to be obsessed by currency exchange rates, and certain cities such as London have earned a reputation for their ability to savage travel budgets.

But now the Aussie dollar is strong, and Australia's major cities have caught up to the rest of the world. Sydney is now ranked the world's third most expensive city, with Melbourne fifth. Ten years ago no Australia city was ranked in the top 50.

So, I theorised, the result of this must be that, for Australians, cities we once considered among the priciest to visit now don't seem so bad. Certainly, these cities will never be cheap compared with the famous budget destinations of South-East Asia, Africa or South America, but they're cheaper than they used to be.

To test the theory, I visited Lonely Planet's Melbourne HQ to thumb through guidebooks in use by travellers ten years ago.


What I found within the pages of the old edition of the London city guide was fascinating. Back in January 2003, the Aussie dollar was buying 35 pence. Factor in Australia's annual inflation rate of roughly 2.8 per cent over the past decade, and the adult entry fee to the Tower of London cost $42.55 in current dollar values in 2003, compared to just $31.70 now. Tourist drawcard Madame Tussaud's waxworks has slid from $45.20 in 2003 to a starting price of $34.10 a decade later, and the tour of Shakespeare's Globe Theatre has slumped from $28.20 to a mere $20.50.

An area where the surging exchange rate has produced big savings is accommodation. In 2003, the YHA hostel near St Paul's Cathedral was offering a dorm bed from $79.60 in adjusted terms. Nowadays they start at just $22.70, a blessed relief for budget travellers. At the upper end, posh 18th century hotel Hazlitt's could put you up in a double room a decade ago from an eye-popping $678 per night. In 2013 the starting price works out at $405.

Food and drink has much improved in affordability too. Ten years ago, the main dishes of the old-fashioned fish and chip shop Rock & Soul Plaice at Covent Garden averaged about $36; now they're $15. That's a decent amount of change to be spent at a nearby pub.


It is still rated as the most expensive city in the world and in 2003, the Aussie dollar was buying just 67 yen. Today it's buying 95, and again I adjusted 2003 dollar values for inflation.

Back then, it cost $8.25 to enter the National Museum, which holds a fine collection of Japanese art from calligraphy to lacquerware. Now it's down to $6.30. Entry to the observation platform of the Tokyo Tower, built in 1958 and modelled on the Eiffel Tower, was $16.10 a decade ago and a mere $8.60 now. Likewise, entry to the Japanese Sword Museum has dropped from $10.30 to $6.30.

As with London, accommodation was cheaper. Ten years ago the Tokyo Central Youth Hostel offered a dorm bed for $63.90; now it's $41.70. At the top end, the starting rate for a double room at the Imperial Hotel has declined from $689 to $419 per night.

New York

With cheaper trans-Pacific airfares and an above-parity Australian dollar nowadays, New York is more popular than it was ten years ago when one Aussie dollar bought 56 American cents.

Prices for sightseeing have slightly declined over the years, according to the old guidebooks and compensating for inflation. In 2003, it cost $18.80 in adjusted terms for a ferry ticket to the Statue of Liberty; today it's $16.20 when expressed in Australian dollars. The New Museum of Contemporary Art has slid from $14.10 to $13.30 for entry.

Accommodation is noticeably more affordable. A decade back, the Chelsea International Hostel offered dorm beds from $55.80, compared to today's starting price of $32.40. With views over Central Park, the Ritz-Carlton's doubles started at a scary $765 per night. Now you could squeeze in from a lesser $567.

Good news on food too. At the fancy Grammercy Tavern on East 20 th Street, the dinner degustation menu is now $110.50; a decade ago it worked out at $188.30.


Another welcome achiever in the field of making things less costly for Australian travellers was my final city, the legendarily expensive Icelandic capital. Ten years ago the Australian dollar was buying about 47 Icelandic krona, according to the guidebook of the time, but now it's netting an extraordinary 135 krona. As prices have risen less severely since then, everything's become more reasonable.

The view from the tower of the strikingly modernist Hallgrimskirkja church cost $5.60 to obtain a decade ago in adjusted terms; now it's $4.40. The city's dramatic two-hour Volcano Show film presentation was $23.80 back then, and a mere $14.80 in 2013.

As for lodgings, the well-regarded Salvation Army Guesthouse offered sleeping bag space for $56 a night, whereas now the same spot can be had for a saner $25.90. Up the scale, the Hotel Holt's doubles once started from $452, but have now eased to as low as $122 when booked online.

With such savings, you could afford to indulge in Iceland's memorable cuisine. A decade ago, upmarket restaurant Laekjarbrekka served a nightly fish buffet for $83.50 per person. Nowadays it offers a more diverse “Icelandic Feast”: for $59, you can enjoy a series of dishes featuring salmon, lamb, skyr (a traditional cultured dairy product)... and cognac-cured horse. Bon appetit!