Knowing a bit about economics comes in handy in many situations of our daily lives, from planning our future to buying at the supermarket.
It comes as no surprise that this also applies to our holidays. So for those who have not decided on their summer plans yet, here some tips to find cheap summer destinations applying some economic principles.
The Currency Exchange market, a good place to start
The currency exchange market is a good place to start because the strength or weakness of the currency of a country influences the final cost of your trip.
On a site like http://finance.yahoo.com you can find graphs that show you the evolution of other currencies against the euro over different time frames. And like this you can see that maybe this is not the best moment to travel to the United States as the Euro is on a very low point compared to the USD. On the other hand, looking at the strength of the Euro against the Brazilian Real, maybe a trip to Brazil could be a good option.
Of course you can look at more things than just the currency rate to find a truly cheap destination. For example, even if Swiss Francs have become a lot cheaper lately, Switzerland is still an expensive country, mainly due to the high purchasing power of its inhabitants. That’s why it is also important to compare the standard of living of your possible summer destinations.
Comparing standard of living indices
As a first step you can look at the GDP per capita of each country. This information can easily be found on www.Wikipedia.org and gives you an estimation of how cheap or expensive life is where you want to go. Although you still have to be careful, there are cheap destinations in rich countries and expensive destinations in poor countries.
Another index you can use is the Big Mac index, created each year by The Economist and comparing the price of the famous hamburger in USD all over the world. It tells you that the most expensive countries to visit the fast-food chain are Switzerland, Norway, Denmark and, surprisingly, Brazil. The cheapest countries are Ukraine, Russia and India.
The Beer Price Index is also useful. This index gives you an overview of the price of a beer in 40 cities all over the world. Important to know if you are a fan of the drink!
The final index we want to point out here is the Club Sandwich Index published by Hotels.com. It shows the average price of the classic sandwich in a range of countries. It may come as no surprise, that the most expensive country is ... Switzerland.
Other costs
Of course there are many more costs you could and should compare and/or investigate. Just remember to apply your economic knowledge to be sure to get the most out of your well-deserved summer holiday!
This article is an adaptation of an article that was published on www.ennaranja.com
