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The dollar's plunge 'makes us poorer'

The Baltimore Sun

SEATTLE -- Is all the bad economic news leaving you feeling as if you need a vacation?

Brace for sticker shock. Rising gas prices, airline fuel surcharges and the plunging value of the U.S. dollar are boosting the cost of travel for Americans, just in time for spring break and summer vacation planning.

"It makes us progressively poorer and poorer," says budget-travel guru Rick Steves, who huddled recently with a group of his guidebook researchers.

His message: "Crank up the cheap tricks."

Rather than pay $20 each for a hotel breakfast during a recent winter break in Rome, Steves took his family on a morning picnic where they sat on the steps of the Pantheon eating a meal of prosciutto, fresh bread and juice, at a fraction of the price.

"Get used to it" is his advice for anyone waiting for things to get better. "This is where America is."

The dollar's freefall against the euro, British pound, Canadian dollar and many other world currencies means even experienced travelers are struggling to find ways to make travel affordable.

With the dollar hitting record lows against the euro, a hotel room in Paris that in January 2007 cost 100 euros, the equivalent of $132, is now $154, up nearly 17 percent using the current exchange rate of $1.54. That price is up 50 percent from five years ago, when the room would have cost $105.

"It knocked me in the face, I have to say," says Tom Meyers, editor of EuroCheapo.com, an Internet guide to budget travel. Meyers just returned from a trip to Berlin and Brussels and Bruges in Belgium.

"I stopped getting the [International] Herald Tribune because it was getting increasingly depressing. They just kept repeating the same headline: 'Dollar hits another low against the euro.'"

Adding to the pain, notes Anna Johnson of Scan East West Travel in Seattle, are higher airfares due to increasing fuel surcharges, airline taxes and fees. "You can get an airfare in the $600-$700 range, but by the time you add on everything else, it's over $1,000," she says.

Last year at this time, Scandinavian Airlines tacked on fuel surcharges of $150 per round-trip ticket on nonstop flights from Seattle to Copenhagen, Denmark, Johnson said. This year, the fuel surcharge is $240, and taxes add an additional $112.

"The major thing we've seen is a shift in destinations," says Simone Andrus, owner of Wide World Books & Maps in Seattle. "We've seen a huge shift to the southern part of South America - Chile and Argentina," where the dollar buys more than in Italy or France.

"People are changing their minds a lot," she's noticed. "One couple came in and returned their Italy books (after friends canceled out on them), and bought books on Prague, Budapest and Krakow."

After paying $8 a gallon for gas and $40 for a pasta-and-salad dinner for two in Bruges, Jim Grant of North Seattle says he and his wife won't be going back to Europe soon. The couple spent three weeks driving through Belgium, Luxembourg and Italy in January and February.

"The food costs were huge," he said. "Tolls from Paris to Bruges came to 30 euros ($45)."

Where will he go next? "Mexico, Hawaii, Asia - somewhere where the dollar still buys something."

Others say they won't be deterred.

When Barb and Pat Hepler of Edmonds, Wash., began planning a three-week trip to Italy a year ago, they estimated their costs at around $5,000.

Their budget is about $10,000 now, including two airline tickets at $969 each and their part of the rent on a Tuscan villa they will share with seven friends.

Still, they plan to be on a plane this week, hoping for the best, even as some financial experts predict the dollar will continue its slide.

"It would be nice if it were cheaper," says Barb Hepler, 51, "but it won't stop us from going."

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