We are planing a Feb. 2008 Italy trip now - I've used Orbitz to buy the hotel room and was able to get a 4 star in Milan (central near the Duomo) for $168/night, 4 star in Rome for $120/night near the Vatican and in Venice 4 stars at the Rialto Bridge for $113/night (breakfast for 2 included). Florence has been tougher but we have one for 88 euros a night in a central location. We've pre-purchased currency (even with fees it was only $1.39/euro) and are pre-buying admission passes. We'll be exposed on the currency for dinners, shopping and some odds & ends - but the bulk will be paid for at today's rates. Yes it will cost more if the rates fall - but unless they go to record lows - we think this is a good bet.

We went to England & Wales in April and it has turned out to be our most expensive vacation so far (pricier than Greece in 2006!). The hit to the wallet for food and lodging is particularly painful; as an example, we paid about $300 for a mediocre Thai dinner for 4 in a small village in the Cotswolds. I'd suggest staying someplace that includes breakfast, and hitting the local grocer for lunch/dinner. Investigate lodging that gives a lower rate for a longer stay.

The exchange rate was so prohibitive that we are talking about avoiding the UK for a few years.

I need help--I flew Virgin Air to Tel Aviv via Heathrow on July 5th and one of my bags is still not back today, July 12. No one at Virgin will help me. I speak to customer service and all they will say is that there is terrible backlog with bags because of terror (?--what's the connection) and that they can't talk to Heathrow but the leave messages. I am so disappointed not only with not having hte bag but with the abominable customer service. Does any one have any idea of what I can do?

The dollar is taking a hit in most parts of the world. Go to South America as the dollar hasn't been as badly hit as in other parts of the world.

For instance, in Brazil there are three levels of currency exchange, commercial, tourist and parallel. The parallel always gives you the best rate and you can find the "cambios" to exchange your US currency at the parallel rate.

Rio and the cities of the northeast, Belem, etc., are still attractive places to visit with your dollars.

Argentina and Peru are also places to investigate. Food is relatively inexpensive in these countries and most hotels come with breakfast.

Caution: Don't go to Rio now as the Pan Am Games will be played until near the end of July.

One way to beat high hotel costs is to stay in a youth hostel. Many youth hostels offer some private rooms with a private bathroom; "youth hostel" doesn't automatically mean you get a bed in a huge dorm with a shared bathroom. The facilities will not be fancy, but it's usually clean (check online reviews and reserve first) but it is far cheaper than a hotel and you're only sleeping there, right? I have stayed in some lovely small youth hostels that had an atmosphere that reminded me more of a bed and breakfast than anything else.

Take advantage of the local grocery store or food shops for meals. In most of Europe, non-restaurant food is significantly cheaper than in the US. You can get high quality fruits, breads, meats, and cheese from the local fruit stand, bakery, butcher, and cheese shop. Especially in the summer, it makes a great (and extremely cheap) meal on the go. As a side benefit, every time I've been in a country, I have learned something interesting about their culture by looking around in a supermarket (A horse section in the meat department? And "Texas"-flavored prepackaged sandwiches made with horse meat? and "American"-style frozen pizza with corn on it?)

Finally, avoid restaurants advertising tourist menus printed in many languages (usually expensive and poor quality). Keep your eyes open during the day and it's likely you'll find a suitable place for dinner. Places that specialize in crepes usually have a variety of sweet and savory dishes for cheap. In the UK, there are a variety of street foods that can make a fast and cheap meal - try a Cornish pasty (pastry filled with meat, vegetables, or potato), a Jamaican spicy beef turnover, or an Indian samosa (pastry filled with spicy beef or vegetables). Many urban pizza places in Italy sell calzones and single slices of pizza to go. In the former Yugoslavia, you can't go wrong with a burek (coiled pastry with meat, cheese, or vegetable filling). Especially at lunch, there's no reason to spend a lot of money. Europe also has many, many Turkish immigrants now, meaning that an inexpensive kebab place is usually not far away, particularly in northern European countries like Germany and the Netherlands.

We just returned from a trip to Spain in the UK. While the UK was exorbitant ($8 is the minimum fare on the Tube in London!), Spain was quite reasonable. Even with the terrible exchange rate, we found that while in Southern Spain, we were paying about the same for things that we do here, if not a little less. Fortunately we have family in London so we had free lodging and many meals in. Otherwise, I would advise people to avoid the UK unless you are able to spend a lot of money.

A note on using ATMs for cash exchanges: be sure to check with your bank before leaving the country and see what fees they'll charge you. And if your bank says they don't charge fees, ask whether the vendor does. IIRC, Visa charges 1% for every overseas transaction, and my bank at least didn't feel the need to tell me that when I called to ask about fees for overseas usage.

On a somewhat unrelated note, it's also a good idea to notify your bank/credit card companies that you are going overseas--if they're extremely alert to unusual use, your card could be frozen.

Go to Turkey! I went to Istanbul last year and had the time of my life. The exchange rate is in our favor for starters, but on top of that, it's relatively cheap there. (With the exception of their museums - they really gouge the tourists with fees of $20 or more to wander through)

What's great about Istanbul is that it's a very cosmopolitan city - mostly still in Europe. Lots of great fashion and food and tons of history. It will cost you more to get there, but once you're there, it's cheap. I spent 12 days there, including airfare and meals for $1300. Oh and stay in the Pancions much cheaper and just as nice as the hotels.

The UK may be prohibitive for tourists right now, but as a gigging musician who's about to head over there for three weeks, I'm psyched about getting paid in pounds and then coming back to the States!

Spruby -
Wondering where you pre-purchased currency. I'm heading to London soon and would love to find a good exchange rate!

kbockl, I wouldn't go to the trouble of pre-purchasing very much currency. I would only bring around 50 pounds or so with me (not really enough to make the exchange rate matter terribly much) and just use ATMs as soon as I get to London. An ATM will give you a far better exchange rate than any exchange bureau.

The UK exchange rate seems to be now $2.05 to the UK Pound. I hike in Scotland every year and have found that the best exchange rate is in the local small-town post office (usually also a good place to buy hiking snacks). Having said that, I'm remembering that I first discovered this in Glasgow, near the University. The down-side of using the post-office is first of all finding one and then determining the hours. However, I doubt this works well if one wants hundreds and hundreds of pounds.

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