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Euro Bargains Beckon: Rising Fares Bite Back

With the dollar at a four-month high against the euro, this summer would seem the time to take that European vacation.

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AP

The dollar on Monday traded at $1.25 to a euro. The currency used by most of Western Europe has been in a nearly two-year retreat as much of the Continent has struggled economically. Monday, U.S. travelers could book a 100-euro hotel room for about $125. It would have cost $132 on Aug. 4, 2010.

But the stronger dollar won't necessarily result in a wave of U.S. visitors, many in the travel industry say.

"When the euro gets cheaper, it does tend to get more Americans to go," says Neil Martin, editor of Trans-Atlantic newsletter, which reports on U.S. travel to Europe. But, he says, the euro will have to drop more for Europe to see hordes of U.S. visitors.

Higher trans-Atlantic airfares are a deterrent, as airlines cope with fuel costs and trim flights. Travel search site Kayak.com says U.S.-European fares are up 11% over last summer. Kayak users are looking less for summer flights to European cities and more for those to U.S. destinations than last year, says spokeswoman Maria Katime.

Marian Marbury, president of Adventures in Good Company, says interest in its Europe trips is down. "More than one person" backed away after seeing a $1,200-plus airfare, she says.

European summer airfares "are at a 10-year high," says Brian Ek, spokesman for the Priceline travel site. Summer hotel rates haven't fallen notably yet, he says, even in countries in dire straits such as Ireland, Italy, Portugal and Spain. Political and economic unrest in Greece, however, are causing a drop in prices and tourism. Booking.com says the best prices are in Southern and Eastern Europe.

Britain, which uses the pound, is traditionally a top destination. Queen Elizabeth II's Diamond Jubilee in June and the Olympics that start July 27 are draws. However, ramped-up prices could deter some. The dollar was trading at nearly $1.57 to the pound Monday.

As the dollar has strengthened, travel to Europe has picked up a bit. U.S. Commerce Department figures show a drop in Americans flying to Europe last year — 10.8 million vs. 11.1 million in 2010. But the department attributes the dip to a more precise tracking system adopted in July 2010. Departures to Europe were up 3% in the second half of 2011 vs. the last six months of 2010, it says.