Financial Crisis

Everywhere I went this summer, France, Croatia, Czech, has seen a big downturn in foreign visitors, mainly those from the U.S. and U.K. Almost everyone I asked said that this has affected their town as well as them personally. I unfortunately feel that the situation is going to get worse, even though the $ is getting a bit stronger.

Well, we are still going to Las Vegas between Christmas & New Years. We area still planning our trip to France for May 2009.

I am hoping that we can get a sweet deal on a really nice hotel room in Vegas. Right now we have a reservation at the Paris, which is just fine. But maybe Bellagio or Venetian will lower their rates a tad and we can stay there....

We have not purchased any tickets yet for the France trip. We are planning & hopeful, but are holding off to see what happens (plus its still a bit early yet, to be buying tickets, etc).

I'm still traveling this winter. I am going to the Christmas markets in Germany and seeing some of Eastern Europe (Dec. 5-23). I'm worried...but I will not change my plans.

You'll want to check in with the branch here called Fodorite Lounge. It's where threads on topics like this are discussed (rather than in the Europe travel forum).

Believe me there's oodles of them right now on this very topic.

kindly, suze

suze-- how rude! This topic is definitely appropiate in the context of European travel, specially when some countries are/will be more impacted than others.

My take is that the European industrial powers (Germany, France) will absorb it better than others.

Our tickets for our late October Italy/Paris trip were bought, hotels booked, apartments secured earlier this year, so it would be too costly to cancel at this point. I wouldn't anyway, except perhaps, the Italy portion, which is the mostly costly part.

Then I think "I'm losing money in my 401K daily, why not spend it and enjoy it!"

I'm half kidding about that, but a part of me means it.

For the record, I took a bath in the market like everyone else. My money is exclusively in mutual funds. I had been looking forward to a nice retirement and selling my house. With both of those on hold for the moment--and having just come back from a 2 month long trip to Australia and New Zealand--my future travel plans to Europe (or anywhere else) are on hold for the moment until this sorts itself out.

I don't think anything substantial can be passed until after the election as Congressmen are worried about the wrath of the voters in a few weeks. Whatever occurs, we are in for a rough few years--as is tourism everywhere.

Yes and no. We bought tickets for our trip to Paris and Barcelona last December when the financial climate was significantly different. I also booked our apartments back in December as well, seemed fine at the time, but now with both apartments at 1300 euros a week, I'm kind of gasping. It hasn't made us cancel our travel plans but I am constantly aware of the value of the dollar vs the euro and worrying that our situation here could easily cause it to spike while we are abroad. Fortunately we paid for half of the apartments last year, so that helps.

We would never cancel our travel plans, but we will try to be more frugal and smart about our existing itinerary. So, we decided to:

Eat at the pricier restaurants for lunch when you can often get the same food for significantly less money and shoot for fixed menu deals when available...Then for dinner snack at home or eat at a cafe or something less costly...

Eat more meals in, which is one fo the reasons why we go the apartment in the first place...

Skip "ticketed entertainment", theater, concerts, opera, etc and opt for places that offer free live music...

Unfortunately, bring back less gifts and souveniers for others, and limiting what I buy for myself...

So just a few little things to help with funds while we're abroad.

Guila, great strategy and that's our plan, as well.

This subject came up today. We're scheduled to leave for Paris in 2 weeks, and my husband is scared to death about the financial situation here and abroad. We don't have that much invested in the trip other than airline tickets that we purchased months ago at a very good price (and used frequent flyer points for one of the tickets) and a few other things that may not be refundable. So, in all, we'd probably "lose" about $1,000. But what am I going to do if we don't go -- stay at home and watch CNBC all day? I'm no financial whiz, but things have to turn around eventually, with our without government help. Maybe I'm an optimist or maybe I really want to go on my trip. By the way, we also have plans to go to the Caribbean with the whole family over winter break. My husband is also talking about cancelling those plans.

I am feeling that things are unstable in my industry. I also have three trips planned. But the plane fare is already taken care of one way or another, and I will just focus on saving money on the trips and elsewhere. The total amount of the trips' costs will not make a life or death difference to my financial situation.

Good luck to everyone! Certainly things look scary right now.

When I look at what has happened to my retirement savings I regret I didn't travel more.

We lost a whole lot of money this year in the stock market and we are retired.

That said, we have FF tickets to Manchester next year for a 3 week trip and we still plan to go.

Six months is a long time and I'm hoping that the market will recover some by then. If not, then we'll just have to economize somewhere else.

I have followed the advice of Harry Browne, since his first book, "How You Can Profit from the Coming Devaluation" (subtitled "A clear and extensive explanation of how the government money system perverts the free market.") was published in 1970, with regard to investing for financial security. The economic principals in all of his books are as valid today as when first published and are not only an education in economics but sound investment advice. It sure has worked for me. I've been re-reading the chapters in my collection of his books on what do do in times like these and proceeding accordingly.

As for travel, our upcoming trip to Ireland was booked (at a terrific price) and paid for months ago. And, we'll probably take our end-of-winter/pre-spring trip. After that, we'll see.

We're very, very glad we went everywhere we went when we went!

Nope, not at all. I have no investments, and I rent so I haven't lost a dime.

Plus, I just received a 10% salary increase.

Things are looking good for a nice two week trip to Paris in June '09.

There are different issues here - whether one's got the disposable cash in the first place, how exchange rates will be affected, and what will happen to prices in different economies. They're all related, of course, and the natural instinct is to hunker down in the face of alarm. But it doesn't strike me as impossible that some people may find bargains at different times and in different places, if they're ready to act quickly.

The falling world economy has actually made our trip to Iceland next week more affordable. When we booked it, the exchange rate on the kronur was around .013. Currently it's down to .009. Doesn't sound like much, but consider that our hotel rate had dropped by nearly $50/night. The exchange rate will make food more affordable too -- ultimately our "splurge" trip has become more of a regular old budget trip by sheer coincidence.

Also planned a trip to Disney this December. I feel like it's important to resist the urge to panic, and to feed the economy if you can -- I know there are so many other factors at play, but I'm a big believer in the impact of consumer confidence.

I still have 1 week of vacation left for the year - was in Italy for 2 weeks in June and just in Greece for 2 weeks - so it's not been a bad year for travel. However all this financial doomsday talk really is unsettling mainly because the current administration, the FED, the SEC, Paulson just have no idea what's going on.

I remember the tech bubble bursting in 2001 (?) but don't recall it being so gut wrenching like this. My portfolio was down 15-20% but ultimately recovered all those losses and more.

As for travel - I was thinking maybe Santa Fe - but domestic travel is such a nightmare. Most of the flights from NYC to Santa Fe take 6 hours- an extra hour and I could be in Europe. I'm on the fence right now...I've got points and cash so I can afford a trip but....

Yet again - à propos my earler post on the Lounge, a significant number of Fodorites are share junkies.

I'm not suprised.

Lauren, when you say "political", what do you mean exactly?

Should we talk about the underlying principles that make people vote (or think) one way or the other?. Or maybe you mean positional politics? Or some other kind you may wish to define.

Do come back and tell.

Hi all,

The Euro is down to $1.42, and the GBP is down to $1.80.

Good time to visit Europe.

We canceled our trip for dd and I to go to Europe and I am okay with that.

We are going as a family (5 of us plus one friend) to Paris in December. Airfare long ago booked and the apartment paid for - so we are going. What we did do was cancel an overnight in London in the middle of the trip.

afterall, I believe Lauren was simply trying to keep the discussion focused on the impact of the economy on European travel plans -- an appropriate topic for this forum -- rather than having it devolve into an argument over who in the administration is to blame, which candidate will save-destroy the economy, etc (which would obviously make it a more Lounge-approrpriate topic). And so far, the other posters have followed suit.

Paris has reported a slight drop in American and Japanese tourists this year, but the mainstay of British and German tourists has increased slightly so figures are pretty much stable... so far. In most other parts of France, tourism has been up around 5% this year.

Even before the events of the past fews days, though, it was predicted that rates in the high end hotels will drift down slightly in 2009, based on studies of hotel occupancy in various categories this year. Budget hotels are still going strong, as they always do.

We are going to Germany soon, there have been moments of doubt, but I've decided to trust. I have vacation time that I must use, hotels and air are paid for so there is no point in worrying.
We are blessing our travel opportunities and money.

I was in Spain the last week in April and 1st week in May. From our guides I heard the same concerns we are having. One guide in Seville told me she and her husband had to take separate vacations. While one stayed with the children the other one traveled and vice versa. They could not afford a vacation for the whole family at one time.
Saw a march in Madrid protesting their government due to finances.
This is not just a US thing. We have lived very well(not every one)
in this country especially some of us retirees who have been able to travel to Europe and Asia every year. I am a retired teacher and now I am beginning to wonder if I can afford to continue this wonderful experience.

Our Oct/ Nov trip is still on. The tickets were with FF miles and the apt is paid for.

We were planning on London in March and will still go if I can get a decent fare. I checked BA this morning thinking I'd book 1 free ticket and buy the other. I almost fell out of my chair when the "free " ticket came back, 50,000miles PLUS $540.00! The lowest coach fare was $1000.00

avalon - that is very high... I saw some great fare recently for London in March...trying to remember where?

We are still going to San Diego, Los Angeles, and San Francisco next week, then I will continue on to Hong Kong. So far so good.

However, my husband wants to wait and see what happen before we continue making reservations for our annual trip to Europe. We were planning a six weeks trip but we will probably shorten it by two weeks. I am working very hard to make sure we don't have to cut our vacation short, but sometimes you just don't have any control.

Those free FF tickets are starting to become not so free. I'm not sure if this is germane only to Continental, but apparently it costs more in taxes to fly into the UK on FF tickets than other spots in Europe. Last year we flew biz class to London and paid the FF miles PLUS over $400 in taxes for 2 people. This year same thing, FF tickets to Paris and paid less than $194 for 2 people. When asked for and explanation, Continental told us that that the UK taxed FF tickets higher than France or Italy (not sure what other european countries). So that was that, we no longer fly through London for any reason since we exclusively fly on FF tickets, it's a waste of money. I'm VERY pleased to see the dollar/euro situation has changed in our favor just 3 weeks before we leave! I hope it's a downward trend for our sake!

Karameli, thank you very much for defining what I meant for the benefit of the poster trying to provoke a non travel-related turn to the discussion.

Yes, I don't want this to devolve into election wars because who is to blame is not travel related and somewhat irrelevant. What is relevant is the impact this crisis will have on tourism as people hunker down to see what is going to happen. Having seen my SEP IRA go south in the last few days makes me very nervous.

I have no plans to curtail my travels. My forthcoming trip to India was paid for long ago, my pocketbook wasn't tied to the stock market, and my business tends to do best when the economy tanks, so I haven't been much affected, at least not yet.

I'm probably going to put off trying to sell my house for awhile though and rent it instead. And I'll be making small cuts here and there where I can just to be prudent, which I need to be at my age anyway.

Still leaving for Paris on Thursday if I can get to the airport (we have no gas in Atlanta...bigger problem). Now, if the Euro continues to slide for the next few weeks, I'll be very happy!

>>>Nope, not at all. I have no investments,<<<

Amen to that, we don't have any either!

StCirq, despite what you say, if you have a house, money in the stock market, money in a bank, etc., we have all seen a reduction in our assets in the past few months.

No one of us is unaffected by these developments. Wherever your money is (unless it is under the mattress), you are affected.

Losses in value of the 401K and mutual funds only really matter when you have to sell and take money out. We are still living from a paycheck and a retirement, so we are going to Germany in December.

For folks who are living off their savings this must be a dreadful time. I suppose to many folks the loss of travel opportunities is less than their most critical worry.

We have become a one car family (vs 2) recently to save money and increase the portion of our income available for nice-to-have items like travel.

Always looking for trade-offs.

Regards, Gary

No investments???...and what do you think a house, a 401K, a job are....? One way or another we are all investing time and/or money and gotten some raw deals lately. ALL OF US.

<<... no investments... I rent... so I haven't lost anything...>>

Where do you keep your money? Under a mattress?

No matter the market there are HUGE advantages to owning property and especially your primary residence.

If you don't own property, and are paying rent so that your landlord can, you are paying much more dearly than those of us who bought a home at a price we can afford at a low fixed rate.

Owning property will prove out the best "investment" over renting every time.

Anyone who thinks they are not affected by this crisis has his head under the mattress.

LaurenKahn1 wrote: "Anyone who thinks they are not affected by this crisis has his head under the mattress."

Even the originator of this thread has been drawn away from discussion of travel in Europe.

Despite the downturn, it is possible to be in a position of feeling unaffected. It's not fair to mock posters who haven't suffered major losses. Not everyone owns stock; not everyone needs to cash out their 401K in the next decade; not everyone's job is affected by market swings; not everyone bought their house at the peak of the bubble.

Personally I've been lucky -- but I certainly don't have my head under a mattress, and neither do the other posters who feel unaffected. And getting back to travel, as I said before, I think those of us who feel comfortable should continue to support businesses -- including airlines, hotels, restaurants, museums, local shops, and so on.

I was not referring to you, karameli. I was referring to other posts along the "I am not affected" line. I simply meant that everyone is affected whether he realizes it or not. I suppose if you have a 100% safe job (as in working for the federal government) and you bought your house 30 years ago and it is paid off, you might be a bit insulated from feeling affected for the moment.

By the way, karameli, I would say that in the current climate consumer confidence just is not there for most of us.

I noticed that because tourism in Europe seems to be down, we were able to get what I perceived to be much better rates on hotels and apartments in Italy and Ireland during peak season (June/July). So even though money is tighter, if the bargains are there because tourism is down, it does allow for more opportunity to travel.

PS* Sorry I got into the "unaffected" conversation, I didn't mean to be part of stirring it up :">

Some may "feel" it more than others and certainly, it has not changed our plan for vacation over the holidays.

My point was that anyone who has any type of account, whether a bank account, savings account, credit card, auto loan or mortgage will "feel" this at some point.

Perhaps you will wake up one morning to find your bank has been bought by another company overnight.

Perhaps you'll face an auto accident with an AIG insured and find whatever company buys that part of AIG less willing to be fair on your reimbursement and repairs.

Worse yet, perhaps your car will be totaled and you'll be forced to buy a new car. It will be very difficult for you to get a car loan, even with good credit.

Look at the food costs at the grocery store. A weekly order may cost you $20 more. When all other stocks fell on Monday, the only stock to show an increase was that good old comfort food, Campbells. And last week? One of the only companies to show a gain? Wal-Mart.
We're all assessing how we live and travel, how far we drive and what the return is on our 401Ks, if any.

In the south, we're waiting in line for a half hour or more just to fill our tanks if the station isn't closed.

Don't underestimate the power of the US Dollar abroad and don't think that you are insulated from the current economic state of our nation. Take advantage of circumstances that benefit you. Consider alternatives and do your homework.

As to this post being in the Europe forum, your decision to spend or not to spend abroad has an impact on Europe and the current exchange rate.

If you're going on vacation or traveling soon, call each vendor, rental car company and hotel and just ask if they have better rates than what you've currently booked. A last minute change could save you much money. And that matters, regardless of whether you feel unaffected or not by the current circumstances.

Anyone on the cusp of retirement, as I am, is going to be affected. At least Social Security was not privatized. Could you imagine if it was all in the market? I have a headache from this.

I am grateful for all the travel I have been able to do. Most people haven't been so lucky. I have been to Western Europe 20-30 times (stopped counting)and some other places as well. If I never go again, it would not be what I would like, but it would not be the end of the world either. After 9/11 tourism took a hit, and, instead of home exchanges (which weren't happening), I went on some smaller trips to New England, Niagara Falls and the Shaw and Shakespeare Festivals in Canada. It wasn't overseas, but it was nice nevertheless. There are plenty of places I could visit closer to home. If home exchange dies for awhile, I will do the same thing.

LaurenKahn1, even if Social Security was privatized, not "all" of the money would be in the market -- only a small portion. Plus, it is my understanding that the SS money would be invested in safer, less volatile instruments.

Over a long time horizon, I'll take private investment over the government any day.

We are still going to Europe via North America and returning via a cruise (Port Canaveral - Rio). I usually do this trip in conjunction with overseas market research for listed Australian and Singaporean companies - interviewing fund managers and broker analysts.

I'm not sure that I will have any clients for this trip (and if I do, will my usual interviewees be there?)

But the trip almost all paid for and hopefully things will look better next year.

I've been keeping an eye on priceline via Biddingfortravel.com for NYC in December and someone recently won the Times Square Westin for $180pn. Sheryl commented that "We would have never seen a deal this good in past years in New York City in mid-December."

I will be holding off for NYC and London as I don't think the prices will go up.

There have significant drops in cruise fares recently. Unfortunately, as I have an Australian TA, I'm not benefiting, but my mother (via a US TA) is looking at the price dropping quite a bit.

...however, the AUD/USD exchange rate has been savaged over the last couple of weeks

Today, I booked my bi-weekly AutoEurope 3-day rental in Paris which usually runs me 100€ and all of a sudden the price is 86€.

"Over a long time horizon, I'll take private investment over the government any day."

...as long, of course, as the government bails me out when the investment goes sour. Or when the investment managers steal my money.

Well that's just it, isn't it, Flanner?

Isn't the whole system based on the idea that what goes up may come down? If you put your money in the stock market you are gambling.

Now we are in a position where people like me who think if you gamble you should take your losses on the chin, are thinking .. but hey, if you do pay the price for your greed and folly, the whole lot of us go down too.

It shouldn't be beyond the wit of American legistators to find a way to pump liquidity in, but make damn sure that those responsible are either sent to jail or bankrupted.

I await the day. But don't expect it to ever arrive.

I always travel frugally. It's easier in a buyer's market. I also like to get away from the throngs of tourists so I guess every cloud has a silver lining.

I still firmly believe that time is more valuable than money, financial markets can't give me more or take any away.

BK writes,

>...even if Social Security was privatized, not "all" of the money would be in the market -- only a small portion. <

It would have been 1/3. That's not "small".

>Plus, it is my understanding that the SS money would be invested in safer, less volatile instruments.<

It would have been invested in the same manner as a 401K plan - thus subject to market conditions.

>Over a long time horizon, I'll take private investment over the government any day.<

Have you actually worked out the returns of putting money into SS vs putting it into a market index fund from 1970-2006?

I did.

Result: For a salaried couple, SS did much better.

Connection to European travel:

Because we do not rely on the small fraction of our savings that are in the stock market for anything but extras, we can afford to take advantage of the decrease in the Euro, should we wish to travel to Europe.

When my flights to Venice for Dec were too badly mangled to be viable and a refund was authorized (but not yet received!) I decided very reluctantly to skip the trip (or even a replacement location) because
1. They said it could take up to 2 billing cycles to get the refund;
2. I AM nervous about the economy and spending almost $2,000 on a trip - the governor of PA imposed a hiring freeze and I'm not too confident a furlough will not follow
3. i really need to redo my kitchen so I can put the hosue on the market

I'm not happy about it!!!

I am lucky that the financial crisis is not majorly impacting my standard of living right now - I am a nurse and since there's such a shortage in the field, I have pretty good job security. It has trashed my 401K for retirement and the equity in my house if I had to sell it now (which I don't). Like everyone else, though I need to cut back on my spending and make sure I do have enough money for retirement. What has impacted my travel spending much more right now, is the price of gasoline which has raised air fares so much. The dollar is stronger against the Euro than when I made my travel plans for Rome 7 months ago, and if it keeps at the value it is now, my trip (minus airfare which was paid for in US dollars) should cost about 10% less.

I live in Vegas, and the economy which was booming when I moved here in 2005, is beginning to really hurt, so those of you who want to come here on vacation, keep watching for bargains because they are lowering the cost of rooms all the time.

I was just in Vegas in June and I was shocked at how empty it was, it was more than it just being summer which is usually a little slower. Rooms at the Bellagio were going for $198!

The financial crisis has not deterred any of my travel plans. So far this year I have made 3 trips including one to Las Vegas and one to London & Paris.
I starting planning for my future about 35 years ago and now have enough to last me for the rest of my life and then some. Yes, I did live within my means!

I can confirm that we saw less British and US visitors to our vineyards this year than last. Scandananavia and Holland seemed to fill the gaps that would otherwise have been there, so those in the Eurozone or with strong currencies.

Strangely there have been more US enquiries over the past week than for quite a while - not sure what this implies.

For ourselves, Italy was depressed already, although housing markets are not as heavily leveraged. So a little more belt tightening, but we had virtually stoped non-essential spending already.

Joseph7820: Way to go, it's refreshing to hear success stories in this terrible financial climate. I feel so blessed that my parents had done the same and now that they are elderly, they are so happy that they chose to live within their means and had a precise plan for retirement. Consequently they still enjoy travel, even on a limited budget, and are planning to go to southeast Asia in '09. Kudos to you, keep on travelin'!

I went to Spain in May and have never seen so few American tourists. I spent a weekend in NYC in June and my hotel floor was packed with Scandinavians! I conversed briefly with a family of 7 from Oslo who got a heck of a deal at the hotel!

Yes my plans have definitely been affected. I was going to go to Santorini next spring and had found a very good deal on flights. I held off booking for a couple of days and then XL went bust. If I had booked my flights would have been with them. I heaved a sigh of relief as an independent booker I probably would have lost my money. I am holding fire now to see if the situation gets any worse before I make any decisions on travel.

I usually take 3 weeks in France each summer. I have already bought and paid for next years holiday in a cottage. I have spent two thirds less on accommdation for next year to take account of the Euro. I'd rather concentrate on getting the spending money together than spend a lot on the house.

We have scaled right down both at home and regarding trips. I have one teenager in college, her older sister will be out of work after christmas when her contract ends. My husband is getting no overtime and I lost my job a year ago due to government cutbacks. We think we are lucky to get away at all in the current climate. The biggest help for us regarding holidays would be for the Euro exchange rate to improve.

i booked our Alpine vacation that would take us to Germany, Austria and Switzerland 3 weeks ago. the money has been earmarked for this purpsose. i feel guilty tho' about going (not exactly sure why) but i already paid for plane tickets and a few hotel nights that have cancellation penalties. so we're still going. i am hopeful that our $$ will go a longer ways once we get to europe.

however, i will hold off on any future travel plans until i feel confident about our economic situation (both in our household and as a nation).

on another topic, i met up with some friends from hawaii yesterday. they are (who would have guessed??)in the tourism industry there, they have been experiencing some significant downturn in tourism for some time, way before the bailouts and financial debacle blew up recently.

I still plan to go on my winter trip to Great Britain and I will not spend any more or less.

Being retired with most of my funds in several different CD's and the fact that about 10 months ago I switched our 401K accounts from stock to Money Market funds has helped. Also, sold the last $100,00 or so of stock that we owned at the same time.

Our interest income will be a lot lower but it will not affect what we do as we have always lived well below our income.

I just don't travel as far...