What the strong Australian Dollar means for local travellers

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The AUD is currently $0.98 to the USD and predicted to hit parity and soar as high as $1.02 to the USD come March 2011. Quite a far cry from, say May 2010, when the greenback was 12% stronger!

While the local tourism authorities (and the education sector) are probably going to have alot to worry about (thank God the Oprah deal was penned when the AUD wasn't so strong), the strong AUD is going to be of enormous benefit to outbound Australian travellers.

Value-for-money Destinations

The news focus might be on the AUD performance against the USD, but the AUD has also strengthened against a whole lot of other currencies. The US, being far away, tends to be more expensive to get to. Besides, not everyone might have set the US at the top of their travel list. As such, savvy travellers should consider visiting destinations closer to home. New Zealand, for example, offers particularly good value. 1AUD gets you NZ1.30. That's 30% EXTRA value per dollar. Also a great time for Australian-based Kiwis to take a holiday back home (don't forget to bring presents!). Slightly further afield, Malaysia is particularly attractive as 1AUD gets you MYR3.04. That's 300% to the dollar. And things in Malaysia aren't too dear. For example, you could have a bowl of laksa in Penang for MYR3. That's the equivalent for one Australian dollar. A similar bowl of laksa would cost AUD10 back home.

Couple this with the cheap deals that budget airlines such as Air Asia are offering, and you'll have a holiday for not very much. Air Asia for example, runs sales that knock one-way tickets to Kuala Lumpur down to AUD99 to AUD128. From KL, you can easily pick another flight to parts of Asia. Air Asia tickets toBali drop as low as AUD125 during a sale. This advice also applies to other parts of Asia. Even usually pricey Singapore hasn't been spared: AUD1 gets you SGD1.28.

And let's not overlook Europe. That dream holiday might actually be affordable now! Currently, 1AUD = €0.70/£0.61. Compare this to May this year when the Euro was tracking at €0.66 in May this year and even worse last year.

US of A

If you do want to visit the US, there are ways to ensure that your money goes a long(er) way. You could exchange money while the AUD is high for future use. Of course, you have to weigh this against whether you'd earn more money with interest in a savings account (minus tax on interest of course). And then you'd have to find a safe place to store all that cash (a home safe or safety deposit box at a bank for example).

Another smart tip would be to use a US-based travel agent to book your domestic US air/train tickets or local tours for a future date. Most times, you only finalise payment when tickets are issued. In the case of tour, you could leave a deposit and finalise payment closer to the departure date. This means that booking a ticket/tour for March 2011 might mean you'll get savings if the greenback further depreciates against the AUD.

Gap Year and Exchange Programmes

Another less-obvious thing to consider would be to take a study break or gap year overseas. Or do an exchange programme if you're still at University. Heading off to the US not only offers a cultural kick, but you get bang for buck on everything from accommodation to food.


If you've ever considered volunteering, the strong AUD also means that many of the volunteering packages come down in price as quite a few of them use the USD for pricing.

Shopping and Finance

Of course, don’t forget to leave room in your luggage for when you go shopping on your holiday. The strong Aussie dollar means potential savings if you purchase things overseas. In the US, search out for the many factory outlet malls for big discounts. If you have somewhere you can mail things to (a friend's house, a hotel where you'll be staying at, etc), you can order online to save on sales tax. As long as the item is shipped out of a different state as the one you're in, you won't pay sales tax. For example, an 8GB iPod Nano currently costs AUD199 in Australia. It costs the equivalent of AUD153 in the US. That’s almost a good 25% cheaper than buying in Australia.

Electronic goods are particular cheap in Hong Kong and Singapore as well. Please remember to find out if you can claim your tax back on purchases. For example, you can claim the 7% GST on purchases made in Singapore and VAT in Europe. Draw up that want list and get ready to spend!

If you want to use your credit card overseas, please look out for cards that don't slug you with fees for using them overseas or for taking a cash advance. A simple google search should toss up a few options.

Time to start planning that holiday!