The dollar gets stronger, and Germany raises the VAT

Better rates

For most travelers, that’s good news—especially for those headed for Europe in the next few days and weeks. A 100 euro hotel room that cost $135 at the end of last year is now only $117. If you’re planning a trip for spring, summer, or fall 2006, you have to hope those gains hold or the trend continues.

The recent dollar strengthening is unlikely to affect 2006 airfare or rail pass pricing. There may be some easing, however, of car rental rates that are guaranteed in U.S. dollars. The major effect will be for costs incurred in Europe, and for that, of course, you have to wait until you get overseas.

Long range planners who’ve scheduled a trip to Germany in 2007 might want to advance that timetable because on January 1, 2007, it appears the country will raise its value added tax from 16 percent to 19 percent. One wonder how the increase will encourage consumer spending, but that’s an issue we’ll leave to the economists.