Australian travellers who chase a jet-setting life on overseas holidays are now finding their depreciating Aussie dollar isn’t going the distance it once did. We talk to guest writer Peter Wood to find out how can you make your dollar go further and what countries still offer a good return.
So how far can we get? It seems to be the US dollar we’re most concerned about. Our dollar is at US$0.89 after recently dropping from its much-talked-about $1.10 high. But if you plan on taking off around the globe, there are ways to come home feeling refreshed rather than ripped off.
Hedge your bets
Expecting to use US currency on your travels? Sure, locking in a travel card rate now could insulate against any further drops. However, beware of honeymoon rates and factor in costs such as card fees to determine the true rate, not the advertised rate.
Another technique could be to keep half your money in a high interest savings account and transfer to a travel credit card only when you need it. This way, you’re not betting all your money on further drops in exchange rates.
The power of lay-by
Tour companies are also combatting a falling Aussie dollar with offers of lay-by packages. Aussies could look for a chance to buy the package they want at today’s price with the remaining funds working harder in a high interest account for a while.
More tips to help you save for a holiday
The Aussie dollar still offers some value against the Euro. European travel hurt Australian hip pockets worst back in 2009 when our dollar hovered around €0.55. Today, it will buy you around €0.70 – an increase of almost 30 per cent.
Value in Asia
If you’re coming home from that European holiday via Asia, consider hanging around. The Aussie dollar is still strong when pitted against the currencies of our northern neighbours.
For example, in 2009 our dollar would buy about 25 baht in Thailand. Today, you’ll still get more than 28 – up almost 15 per cent. It could mean squeezing more value from a beach holiday or food safari. The same goes for the South Korean won and Malaysian ringgit – our dollar is up on 2009 levels and actually almost level with where it was in 2010.
The Aussie dollar is also buying around 88 Japanese yen. It is less than at the start of 2013 but Aussies are still saving around 40 per cent from 2009 lows.
Value on our doorstep
Meanwhile, cash can still go further in Indonesia. Tourist hotspots may be more expensive than they were back in say, 2003, but our dollar is worth double against the Indonesian rupiah than it was then.
Let’s not forget
Still keen to head to the US? Put things into perspective. In 2009, an Australian dollar would buy travellers around 72 US cents. It buys around 91-92 US cents today. Forget this year’s high, you’ll still be saving 28 per cent more than those travelling three years ago.
Are travellers even worrying?
The number of Australians taking holidays overseas was up 2 per cent in May from the previous month. March also saw an increase of 3 per cent, according to the Australian Bureau of Statistics.
Perhaps Aussie travellers are resilient to the falling dollar when it comes to luxuries such as travel. If getting around the world still sounds like a stretch, keep in mind that our currency has only weakened around 10 per cent. Maybe try going for a shorter trip instead.[Sources]