It's the upside to currency fluctuations. While the local economies suffer, for the most part, when the value of the currency drops, it does make those locations more attractive to foreign travelers because of exchange rates. Here's hoping for a robust summer vacation season.
Here’s a silver lining to the selloff in emerging-market currencies: Trips to Patagonia, Istanbul and Rio just got a lot cheaper.
World-leading losses in the past year from Argentina’s peso, Turkey’s lira and Brazil’s real coupled with inflation rates near record lows have folks on Wall Street and beyond excited about cheaper summer vacations to exotic locales.
“This is basically my Holiday Index,” Ronak Gopaldas, a London-based analyst at Signal Risk, said on Twitter, referring to nations whose currencies have sold off recently. He added that he booked a September trip to Budapest, where the Hungarian forint has fallen 3.9 percent in 2018.
The Bloomberg Vacation Index looks at the developing countries that have become cheaper to visit in the past 12 months. (Scores refer to the dollar’s appreciation against each currency adjusted for inflation.)
Anastasia Levashova, a London-based fund manager at Blackfriars Asset Management, said she was encouraged by the Turkish lira’s depreciation ahead of her August trip to see family in the coastal city of Izmir. Josephine Shea, the Boston-based director of emerging-market debt at BNY Mellon Asset Management, said Argentina has moved up the short list of places to travel with her husband and three sons.
“Argentina has something for everyone: ranches and horses, vineyard visits for the parents, fantastic food and restaurants, and beautiful seaside resorts,” Shea said in an email. “There is always an upside to every downside: weaker currency and great country equals top of the family adventure destination list.”
While Turkey and Brazil haven’t seen big booking spikes due to security risks and complicated visa procedures, Argentina is generating a buzz among travelers seeking a mix of adventure, food and wine, according to Julie Danziger, director of luxury travel services at Ovation Vacations in New York.
Cheaper prices don’t hurt: On Tuesday, half a kilo of bife de chorizo, a bottle of Saint Felicien Malbec and a salad could be found at Happening, a Buenos Aires steakhouse popular with tourists and business-folk alike, for about 1,280 pesos or $50. The cheapest cut at New York’s Smith & Wollensky, by contrast, will set you back $49 for the meat alone.
–With assistance from Paul Wallace, George Lei and Andres R. Martinez.
©2018 Bloomberg L.P.
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Photo credit: Patagonia (pictured) will be much more affordable now due to currency fluctuations. Killy Ridols / Flickr