For our honeymoon, my wife and I (Tim) went to Argentina. There were a number of reasons the country attracted us — gorgeous architecture, delicious wine and steaks — but one important factor was the exchange rate. In the year before our 2009 trip, the Argentine peso had lost more than 15 percent of its value, meaning that we could expect bargains on almost everything we bought.
But finding a great macroeconomic bargain is about more than simply looking up exchange rates. Currency depreciation often leads to inflation — higher prices — in which case your dollars might buy more pesos (or yen or euros or what have you) without actually buying you more steak. That’s why we created the Vox Vacation Index, which combines exchange rate and inflation information to tell you which countries are getting cheaper to visit:
In absolute terms, of course, a poor country with low wages is almost always going to be cheaper than a country with high living standards. But our vacation guide assumes that you’re going to want to visit different kinds of places over the course of your life. Maybe you'd like to eventually make it to Paris, Rio de Janeiro, Shanghai, and Bangkok. This map shows the countries that are offering an unusually good deal right now. Not “is France cheap?” but “is France cheaper than it was a year ago?”
To answer this question, we combine two different pieces of data: the change in the exchange rate and the local inflation rate.
Every day, we pull in the latest exchange and inflation rates, so the rankings change as we receive the most up-to-date information.
|Country||Vox Vacation Index||Today’s exchange rate||Exchange rate one year ago||Inflation rate|
You can see our list of 48 countries above, with the best deals at the top — and we’ve also created a map that shows where in the world the relative bargains are right now.
You might notice that the countries topping our list of vacation bargains tend to be countries that are going through challenging economic times.
It might feel wrong to travel to countries with weak currencies — like you’re profiting from the misery of others. In a sense, you are. But you shouldn’t feel bad about it — by visiting you are helping to solve the problem.
Countries benefit when tourists visit and spend money. And countries need the most help during periods of economic hardship. Often, an economic downturn means that the locals are spending less money on hotels, restaurants, and other services. A flood of American tourists helps to offset these losses in industries that tend to go through big boom-and-bust cycles.
So enjoy vacation bargain-hunting with a clean conscience.
Notes on methodology: Inflation figures are for the year ending in the most recent month available from OECD, Costa Rica National Institute of Statistics and Census, Central Bank of Dominican Republic, Thailand Ministry of Commerce, General Statistics Office of Vietnam, Australian Bureau of Statistics, and Statistics New Zealand. Argentina’s inflation rate is based on consumer prices in Buenos Aires because the government isn’t currently publishing a reliable national inflation rate. Currency exchange rates come from Open Exchange Rates.