All the World's a Bargain

By John Greenwald

The mighty dollar makes prices right for Americans traveling abroad

When embarking on foreign vacations, a generation of U.S. tourists could look to the mighty dollar as a generous and supportive traveling companion. For the first two decades of the postwar years, highly favorable exchange rates made vacationing abroad, particularly in Europe, a bargain that more and more Americans could not resist. Then in the late '60s and into the '70s, the growing strength of foreign economies and a weakening dollar sent prices skyhigh, transforming the trip abroad into an expensive, even prohibitive luxury.

Now the good old days are here again. Thanks to the U.S. currency's continued record-breaking run, delighted Americans have been getting more for their money than in many years. Said New Yorker Joanna Silverblatt, 30, during a shopping spree in Rome: "I feel as though I'm at a candy store. I'm buying much more this year."

Silverblatt's feeling came from a dollar that this summer has hit all-time highs against nine foreign currencies, including the British pound, the French franc and the Italian lira. The surge has helped to propel American tourists abroad in ever growing numbers. Applicants at the 13 U.S. passport agencies have had to wait up to eight hours this summer just to reach the counter, and clerks have been working six-day weeks. The frantic pace should outstrip last year's, when U.S. travelers made a record 25.3 million trips abroad.

Even though the dollar's strength works tirelessly for the tourist, experts have a few tips on how to get the most for the money. They advise travelers, for example, to use credit cards rather than cash. Reason: giants like American Express buy foreign currencies at the most favorable rates before paying foreign merchants, and then pass some of the savings to cardholders when billing them in dollars for their purchases abroad. Traveler's checks also generally earn better rates than cash because they are easier and cheaper to process. In addition, tourists can gain up to 5% by changing money at banks rather than hotels or airports, which stay open past banking hours and charge for their convenient service. When booking return flights to the U.S., travelers can also stretch their dollars by asking to be billed in the currency of the country from which they will depart.

A look at where the bargains are:

EUROPE. The Old World remains the American's favorite overseas destination, and Britain is the most popular spot. A record 2.5 million U.S. visitors may see the British Isles this year, attracted partly by a pound worth about $1.30 today, in contrast with $1.50 last year and more than $2.30 in 1980. "Trading this summer has been fantastic, and we put it to the drop in the pound," says Roy Stephens, managing director of London's jumbo-size Selfridges department store.

Among the bargains heading Americans' shopping lists are British clothes and fine china. At a London Wedgwood shop, five-piece settings that went for $95 in 1980 and $68 last year have been selling for $64. Stepping out in London has also become cheaper. A typical dinner for two at the Hilton International London now costs up to $52, vs. $62 last year and $96 in 1980. Although tickets for hot shows like Cats still range up to about $18, front-row seats for Agatha Christie's long-running The Mousetrap, which cost some $14.50 four years ago, have fallen to around $11.

In Rome, bargains begin on the cab ride from Leonardo da Vinci Airport to the city. That 25-mile trip cost $30 in 1980, but is only $21 today. When they check into their accommodations, tourists find that the values keep coming. A double room in the first-class Quirinale Hotel starts at $73 a night, down from $105 in 1980. A four-course meal with wine at a good restaurant can come to just $15 a person.

But Rome's elegant boutiques seem to be the American tourist's chief delight. Items like Fendi purses and Missoni sweaters may cost anywhere from one-third to one-half less than in U.S. stores. Among recent happy shoppers was Victor Alfaro, 21, a fashion-design student who paid $90 for a pair of two-tone Beltrami loafers that sold for $150 in 1980. Clothing Shop Owner Pino Maugeri will make silk blouses to measure for $56 and have them ready in 48 hours. The same garments cost $60 last year and nearly $100 in 1980.

Paris offers a mixed bargain picture. While the dollar now buys more than twice as many francs as in 1980, many merchants have seen the tourists coming and pushed up their prices. Still, travelers who look hard can ferret out some deals. At La Cave de la Madeleine wineshop, a bottle of vintage champagne starts at $13, down from $23 four years ago, and cognac prices have also fallen. French and other European-made sportswear can be enticingly cheap as well. Houston Teacher Karen Waugh reported that her husband paid about $60 for a pair of Adidas running shoes that would have cost $100 at home.

Good buys are available at some Parisian hotels and restaurants. A double room at a two-star hotel can be just $28 a night, with a Continental breakfast included. But the four-star Ritz charges $210 for a double, up 16% from 1980. Competition, meanwhile, has forced many dining spots to hold down prices. A meal at Fouquet's on the Champs-Elysees now costs about $29 a person, or a little more than half what it was in 1980.

In West Germany, poor weather has so far dampened tourism. When Americans do show up, they should find some attractive values since the dollar now buys about 2.8 deutsche marks, in contrast with some 1.8 in 1980. Though car rentals are expensive and the best seats at the Munich Opera Festival cost even more than opera in New York City, many German hoteliers have been scaling back their prices. A single room at Munich's prestigious Hotel Vier Jahreszeiten currently goes for $100 a night, down from $130 four years ago. Near by, a camera shop offers the latest Leica model and lens for about $925, which Store Owner Victor Meier-Mietinger says is nearly one-third less than U.S. discount prices.

Alert European travelers can gain added savings by applying for refunds of the value-added taxes on their purchases. A type of sales tax widely applied in Europe, the VAT can run about 15%. Many shops are willing to handle the paperwork that it takes to have the levy returned after customers spend a specified amount. London Wedgwood shops pass out the forms with purchases of at least $39. Tourists complete the documents on leaving the country (to get credit, they must have the purchases with them), and can begin looking for their refunds in two to four weeks. If shops mail goods directly to the U.S., the VAT is not collected.

LATIN AMERICA. American tourists in Mexico are finding that the drop in the value of the peso, from 23 to the dollar in 1980 to about 190 today, has more than offset inflationary price rises. A room in the El Mirador Acapulco that went for $38 last year now costs just $16. The Mexico City subway fare is only one-half a U.S. penny, and 65-c- pays for a movie ticket. But swank shops in Mexico City's so-called Pink Zone can fool the unwary. For his $50 the tourist may get only imitation Gucci shoes, but real Christian Dior and other designer-label apparel is available for less than U.S. prices. Some visitors, however, find the clothes a bit dated. Said New Yorker Cindy Altfeld: "High fashion hasn't really hit Mexico."

Bargains are harder to locate in South America, where many businesses gear their prices to whatever wealthy tourists are willing to spend. Nightclubbers currently pay $13 a person for the show at Rio's Plataforma I; it was $10 last year and $7 in 1980. Says Club Director Jota Martins: "We don't think our prices are high. They may be so for the average Brazilian, but the average Brazilian does not come here." Nonetheless, travelers can find some buys in South American countries. At La Costa Verde restaurant near Lima, a leisurely seafood lunch with drinks and wine still costs $14 a diner, the same as in 1980. Popular Brazilian agate ashtrays that went for $8.60 four years ago now cost less than $6, and the $1.50 that it takes to buy a bottle of good Argentine vodka is half of last year's price.

FAR EAST. Even though the yen has fallen 9.9% against the dollar since 1980, Tokyo remains an expensive place to visit. "I haven't found anything cheaper in Japan," snapped a visitor from Ohio. Dinner at a good Tokyo steak house runs about $24, up $8 from 1980. Nor are electronic wares or other Japanese specialties particularly cheap. American shoppers are finding that high-quality Japanese cameras cost about as much in Tokyo as in New York City. But many travelers say that they did not go to Japan for the bargains. One survey found that most Americans were attracted to the country mainly by the opportunity to see its lifestyle. Respondents ranked shopping a distant fifth.

Elsewhere in the Orient, prices also tend to be high. However, a little bargaining at places like Bangkok's five-star Peninsula Hotel can secure a single room for $52, or about half the posted rate. In Hong Kong and Singapore, duty-free shops display jewelry at up to 50% savings. But what some visitors seem to crave most are the comforts they left at home. Asked about Singapore's best bargain, a Texan replied, "A Big Mac, french fries and a Coke." At a price of $2.15, that Far Eastern meal cost half a dollar less than it would have in Dallas.

--By John Greenwald.

Reported by Leonora Dodsworth/Rome and John Wright/London, with other bureaus

With reporting by Leonora Dodsworth/Rome, John Wright/London, other bureaus