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 The Brancatelli File

joe ACROSS THE FINANCIAL POND
TO EUROPE THIS SPRING


BY JOE BRANCATELLI

April 1, 2004 -- The Major League Baseball season started in Tokyo this week and everyone I know is going to Europe next week. Both of those tidbits seem like really bad April Fool's jokes to me.

Since this is not ESPN.com, we shall dispense with the sports talk. But as for this Europe thing, well, I gotta say: Are you people nuts? Have you seen the exchange rate for the euro and the British pound?

I can't imagine a less financially felicitous time to head across the pond yet it really does seem like everyone I know--and a whole mess of folks I don't--are off to Europe this spring. Maybe it's all that pent-up demand since 9/11. Maybe it's the fact that transatlantic airfares have been so attractive. Whatever the reason, European travel is spiking upward-- Tauck, the tour operators, says bookings are up 70 percent year over year--and the summer trendline is headed in the same direction.

I don't mean to be a spoilsport, I really don't, but I keep coming back to this exchange-rate problem. Even with its modest rally in the last couple of weeks, the dollar is buying just 80 euro cents and just 53 British pence. This, my friends, is financial suicide for Americans headed over there. As recently as two years ago, it was 85 U.S. cents buying a euro.

That huge swing cannot be ignored. It means that a 100 meal in a Parisian bistro or a Roman trattoria, which cost just $85 in April, 2002, now costs about $125. A hotel room in Munich that costs 200 a night is the equivalent of about $250 today. That same room cost Americans just $170 two years ago. Ditto cab rides, shopping, museum admissions and whatever you may be buying in Western Europe.

And maybe we shouldn't even try to describe the state of the dollar versus the pound. Britain, and especially London, has always been a beloved, but high-cost, destination for U.S. travelers. But with 1 costing Americans $1.85 or so, you can simply assume that everything in the United Kingdom costs double what it costs here in the USA.

Now I'm not going to try to talk you out of going to Europe. Besides, if you're headed there on business, there isn't much you can do except grin and bear it. But if you're headed over for fun in the next couple of months, I do have some tips to offer to help you manage the financial crisis.

RETHINK YOUR ITINERARY
If you're in need of a little Provence or have decided you can't live another year without the Tuscan sun, well, be ready to pay for your pleasure. But if your goal is to go somewhere in Europe, may I suggest you look East? Acceptable hotel rooms in Eastern Europe are extremely pricey, I admit, but everything else in places like Poland and Hungary is a comparative bargain. And if you've never been to Cracow or Budapest, then you've got a real treat coming. Turkey and Portugal are notable bargain spots, too.

RETHINK YOUR FLIGHT PLANS
The give-away fares to Europe that you saw over the winter have largely disappeared. Summer fares this year don't seem particularly out-of-line by absolute standards, but they may seem outrageous by comparison. So let me make a suggestion: Consider flying into London or Dublin. Fares into those two cities are generally lower than anywhere on the continent and, once there, you can take advantage of the low-priced airlines like Ryanair and easyJet. But don't assume you have to switch carriers: British Airways and Aer Lingus offer extremely competitive fares to Europe over their respective London and Dublin hubs. And don't forget Lufthansa. It has developed a second hub in Munich to complement its Frankfurt operations, it has a huge number of seats across the Atlantic and it offers terrific flight schedules within Europe. If you are hoping to use frequent-flyer miles from a Big Six carrier to fly free to Europe, be prepared to be extremely flexible about destination and dates. Or, make your life easy: Claim the unrestricted awards at the higher mileage level.

CASH THOSE HOTEL AWARDS
One of the nice things about hotel frequent-stay awards is that they are not tied to the exchange rate. The hotel room that cost $170 two years ago, but $250 this year, still costs the same amount of frequent-flyer points. So consider using your points this year to cash in on a free room in Europe.

CONCENTRATE YOUR TRAVEL
This is not the year to go gallivanting around the continent. The more you move from city to city, the higher your cost. Consider putting down roots in one place and then taking day trips from your base of operations.

PACKAGE YOUR TRAVEL
If you're not trying to use frequency-plan rewards to claim free airline seats or hotel rooms, then look into buying an air/ground package. I'm not talking about a "tour," those pre-programmed things that bounce you from place to place in a bus. I'm talking about a package of airline seats, hotel rooms and other travel necessities. Packages generally beat the price of buying the components separately because the packagers have more buying power than individual travelers. And packages these days are more flexible than ever: You can choose from virtually any hotel you want and sometimes even get a shot at reduced-fare upgrades to premium-class travel.

TRAVEL LIKE A EUROPEAN
For a slew of logical reasons, Europeans use the continent's extensive rail networks to terrific effect for holidays. You can get almost anywhere you want in Europe on a train--and it's usually cheaper and easier than driving. And if you start your holiday by flying to London, don't forget the Eurostar, the train that plies the Chunnel. You can get from London to Brussels and Paris in no time and there are now an array of competitively priced, advance-purchase prices. But a caveat: The growth of low-fare airlines has changed the face of intra-Europe travel. Ryanair, especially, offers cheap travel to dozens of destinations. ("Ryanair is Southwest Airlines without the frills," quips my expat friend Chris Vukelich.) And one of Ryanair's perceived disadvantages--it often flies to secondary and tertiary airports rather than a destination's primary airport--may work to your advantage. Many of the best European countryside getaways are actually closer to the airports served by Ryanair than the big-city airports.

GET THE PASSES
All the major European cities have travel passes that can significantly cut the cost of entry into the best museums and attractions. Many also come with discounted mass-transit cards and other perks. Unfortunately, there is no central source for the passes. Try European City Cards. (Consult Select Italy for Italy-specific cards.) And always check the sites maintained by the national tourist offices; start at VisitEurope.com to get those links. And a final note: Europe By Air is a unique pan-European air-pass program that offers travel at $99 a segment. It's not for everyone, but take a look if you plan to bounce around the continent.

HAVE YOUR BANK CARDS IN ORDER
Forget traveler's checks or converting dollars to euros and other currencies before you go. The best way to get cash is from ATMs at your destination. Just make sure that you have your financial ducks in order: a 4-digit numeric PIN and a clear understanding of what, if anything, your bank will charge for an overseas withdrawal. If your bank charges you for overseas ATM access then, frankly, you're with the wrong bank or have the wrong kind of checking or savings account. As for other charges, you're still better off using your Visa or MasterCard, or, even better, your American Express or Diners Club. You'll get the bank's wholesale rate on the exchange, minus any transaction fees (and make sure that the transaction rate doesn't exceed 2 or 3 percent).

REMEMBER THE VAT REFUND
Planning to do substantial and/or high-ticket shopping in Europe? Then keep in mind that the 15-25 percent value-added tax bundled into most purchases may be refundable. To be honest, however, the refund process is complicated, cumbersome and fraught with glitches. Still, if your potential refund could run into the hundreds of dollars, surf to the Global Refund site and unravel the details.

AND A FEW LAST WORDS...
Some European hotels are trying to get their top-line nightly rates down by unbundling the VAT tax and breakfast from their quoted prices. Make sure you know exactly what the hotel is quoting before you reserve. ... Remember that the lowest-price car rentals in Europe usually do not have air conditioning and automatic transmission. And if you're thinking of renting for three weeks or more, check out the Renault Eurodrive program. You can save some money and get a new car to use, too. ... You want to know about phones? Hey, why do you think I've been telling you to get a GSM mobile phone? If you don't have a GSM phone, go to a Cyber cafe and use an over-the-Web calling service. Everything else, including AT&T's once admirable USA Direct program, is absurdly overpriced. ... Bmi, the former British Midland, flies from Chicago and Washington to Manchester, England, and has just introduced 14-day advance-purchase fares for its upgraded-coach and business-class cabins. Other airlines may soon follow suit on some of their routes. So keep your eyes peeled for premium-class bargains.

This column originally appeared at JoeSentMe.com

Copyright 1993-2004 by Joe Brancatelli. All rights reserved.