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Published: Dec 20, 2022 6 min read
Illustration of a tourist at the airport with a giant wallet looking suitcase full of bills.
Errata Carmona for Money

American travelers are picking up designer outfits in Milan, buying handbags in London and perusing jewelry collections in Paris.

All across Europe, in fact, Americans are shopping alongside of their sightseeing, as they take advantage of a strong dollar that is stretching their purchasing power abroad amid the rebound of international travel. Part of the allure is "revenge travel," or making up for lost vacations during the pandemic, but the strength of the dollar is also motivating Americans to plan trips and spend more while traveling abroad, experts say.

Based on its flight search data, Expedia is reporting double-digit percentage growth for air travel interest to major European cities this winter compared to the same time last year, and according to a November report from Bain & Company, American tourist shoppers are helping fuel the recovery of Europe's luxury goods market.

Ever since the summer, Shawna Owen, president and CEO of Huffman Travel, says clients are increasingly requesting time in their itineraries for shopping because “it’s basically like having things on sale.”

Owen mainly works with wealthy travelers booking luxury trips. She says they’re splurging on designer items in Europe and have been asking her for advice on bringing their purchases back into the U.S.

Even when paying duties, she tells them it’s still going to be much cheaper to buy luxury goods while they're on their trips, plus it provides a fun origin story for their purchases.

In countries where the dollar is strong compared to the local currency, it’s not just shopping that’s cheaper for American travelers. Dinners out, taxis and even boat rentals are all easier to afford — sometimes as much as 30% cheaper than usual, Owen says.

Travel is up where the dollar is strong

Travel experts say favorable currency exchange rates are motivating Americans to plan trips to destinations where their money will go farther right now than it has in the past. The dollar is strong against the euro and the pound, which makes it a good time to visit European countries.

“Emboldened by the strength of the U.S. dollar combined with other factors like pent-up demand, more U.S travelers are traveling overseas to stretch their dollars further,” says Edith Morris, a spokesperson for Expedia Group.

Flight searches for winter travel to Paris are up 85% compared to last year, and London is also hot, with searches up 40%, according to Expedia’s data.

The dollar even reached parity with the euro in July for the first time in two decades. While it has lost some strength in recent months and one dollar is now valued at less than one euro again, the dollar is still about 6% stronger against the euro than it was a year ago, according to currency conversion website XE.com. And it’s nearly 9% stronger against the pound than it was a year ago.

While Europe is frequently the region with the highest demand from U.S. travelers, a higher-than-normal number of American travelers have been visiting the continent recently, according to data from travel booking app Hopper.

Hayley Berg, Hopper’s lead economist, says there’s also been a surge of travel demand to China as the country has moved toward reopening major cities. It helps that the dollar is more than 9% stronger compared to the yuan than it was a year ago.

Jennifer Pietrzak, a New York City resident who loves to travel, says she noticed that everything felt cheap when she visited Porto, Portugal in April, when the dollar was about as strong against the euro as it is now. The highlights of the trip were experiencing the culture and meeting welcoming people — experiences she would have had regardless of the conversion rate. But it was also nice that her time there didn’t break the bank.

She’s been trying to find a way to get to London, in part because she’s been watching the dollar’s movement against the pound. She says she's jealous of friends who have found great deals shopping for luxury items on recent trips to Europe.

This summer, one friend saved more than $200 on a pair of Gucci loafers by buying in Italy instead of in the U.S., and another friend saved even more buying a Max Mara teddy bear coat on a recent trip in Croatia, Pietrzak says.

But the challenge she’s having is getting an affordable flight to London because airfare is expensive. (For example, airfare prices for international flights around the Christmas holiday are 30% higher than last year, according to Hopper.)

The strength of the dollar typically doesn’t make international flights or hotels cheaper because Americans book those in dollars.

Owen says Pietrzak's struggle getting good flights isn't unique. Airfare is “through the roof,” and her agency has been finding that many international hotels are 30% to 50% more expensive than they were a couple years ago.

“People are paying a lot more to sleep and to get there," she says. "But then once they're there, that's where they realize the value."

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