A Sinking Dollar Is Making Your Dream Vacation Way More Pricey This Year

In January 2025, the U.S. dollar was charging toward its 2022 highs, riding a wave of investor optimism as Donald Trump returned to the White House. Wall Street was betting on tariffs and domestic tax cuts to strengthen the greenback.

However, just six months later, the narrative turned on its head.

The dollar has posted its worst first-half performance since 1991, with the U.S. Dollar Index—a widely followed gauge of dollar strength on Wall Street—down more than 10% year-to-date, hitting levels not seen since September 2021.

Now, the dollar's sharp decline is no longer just a trader's concern.

It's starting to bite American tourists, who are discovering that their dream vacations abroad—from croissants in Paris to cocktails in Cancun—come with a noticeably higher price tag.

Here are five favorite destinations where U.S. travelers are feeling the squeeze this summer.

Paris: That Croissant Just Got A Lot Fancier

The euro – as tracked by the Invesco CurrencyShares Euro Currency Trust (NYSE:FXE) – has gained 14% against the dollar this year, sending the exchange rate above 1.18 euros per dollar.

That means American travelers are now getting less than 0.83 euros per dollar at current exchange rates, as the dollar extended its losing streak to 10 consecutive sessions on July 1—a run not seen since 2003.

Whether it’s a rooftop view of the Eiffel Tower or a walk along the Seine, your dreamy Parisian holiday is now pricier.

In May 2024, the average daily rate (ADR) in Paris was $193 when converted into dollars, according to ArRoi, a platform that tracks Airbnb Inc. (NASDAQ:ABNB) prices.

By May 2025, that figure climbed to $207. If July follows last year's seasonal spike when ADR hit a peak of $220, prices this month could push above $235, assuming similar trends.

London: More Pounds, Fewer Dollars

The British pound – as tracked by the Invesco CurrencyShares British Pound Sterling Trust (NYSE:FXB) – has gained 9% against the dollar in 2025, with one dollar now buying just 0.72 pounds.

London's ADRs on Airbnb jumped from $154 in May 2024 to $216 this year—a staggering 40% increase.

With July 2024's ADR at $176, this summer could see London rentals reach $245, based on similar growth.

So if you're eyeing fish and chips by the Thames or a Harry Potter studio tour, prepare to pay London prices in full.

Read also: A Weaker Dollar Just Unlocked A Surprise 2025 Winner — And Smart Money Is Moving In

Rio de Janeiro: Samba With A Stronger Real

The Brazilian real has appreciated by 13% against the dollar so far in 2025, making travel to Rio de Janeiro more expensive, even during the off-season.

Rio's average nightly Airbnb cost climbed to $75 in May 2025, up from $64 a year earlier. Food, transportation and tourist attractions are also eating into budgets as the dollar's value shrinks.

Brazil's natural beauty remains breathtaking, but your beachside caipirinha is now served with a stronger exchange rate.

Cancun: Peso Packs A Punch

Even neighboring Mexico is less of a budget-friendly haven this year. While Cancun's cost per night has held steady at around $72, the Mexican peso's gains are making everything else—from margaritas to excursions—more expensive.

You're now getting just 18.70 pesos per dollar, a sharp 9% drop from the 20.70 pesos you would've received at the start of the year.

According to Numbeo, a typical restaurant dinner for two in Cancun now costs 1,000 pesos, or more than $50—and that's before you even order the margaritas.

Toss in tips, taxis and tourist excursions, and your wallet starts feeling the peso's punch.

Bangkok: Still Budget—But No Longer A Steal

If Bangkok is on your list for a bachelor party or epic friends' getaway, get ready to spend a bit more this year.

Thailand remains a budget destination, but inflation and currency changes are closing that gap.

The Thai baht has strengthened 7% in 2025, while Bangkok's average nightly Airbnb rate has surged from $39 in May 2024 to $51 this year.

If July follows last year's trend—when ADR hit $42—travelers could now be facing nightly rates near $60, a price they didn't even see during peak season in January.

Still cheaper than Western Europe, but not the bargain it once was.

The Bottom Line

What started as a dollar resurgence in early 2025 has turned into a historic slump, leaving U.S. tourists footing higher bills across nearly every major destination abroad.

With the U.S. Dollar Index down over 10%—its worst start to a year since 1991—the greenback's weakness is hitting travelers where it hurts: their vacation budgets.

That dream summer trip abroad now comes with a steeper price tag, and the dollar simply doesn't go as far as it did just a year ago.

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