5 Travel Destinations That Will Offer Better Value in 2016

For 2015, I listed Japan, the Eurozone countries, Russia, Poland, Australia/New Zealand and Singapore as countries that will become a whole lot cheaper throughout the year. These predictions turned out to be mostly correct, though at varying degrees. I was wrong about one (find out which one below!). Here is a summary of last year’s predictions and outcomes:

• Singapore Dollar ended 7% cheaper in 2015 and is now at its lowest level since the global financial crisis of 2008-09
• Russian Ruble plummeted by more than 20% in 2015 after already suffered a 50% loss in 2014, offering even better value to tourists in 2015
• The Euro became 10% cheaper in 2015
• The Aussie and Kiwi dollar sank in tandem in 2015, by around 10 to 12%
• The Polish Zloty also sank by 10% in 2015
• Despite a popular notion on a weaker Japanese Yen, the Japanese currency ended in 2015 almost unchanged, but was at its weakest in April when it touched 5% weaker compared to the beginning of the year — I was wrong on this one when I predicted that the Yen would continue to get weaker in 2015

You can revisit last year’s list here.

As what I have done for the past two years, here is my fearless prediction for 2016’s countries that will offer better value as travel destinations, as well as my reasons for citing them.

Brazil

brazil’s currency lost around 1/3 of its value in 2015 alone!

Facing an imminent “lost decade,” Brazil will likely have a bittersweet 2016. While this is the year it will be hosting the Summer Olympics, its economy is in a sharp recession – one that has not been seen for generations. As Brazil mostly exports commodities to places like China, where growth is slowing down; the outlook is not good for Brazil’s currency, the Real, which will likely depreciate further this year.

Apart from Brazil, nearby countries such as Venezuela, Argentina and Peru which also have economies dependent on natural resources are likely to see their currencies weakening for this year so a South American trip for 2016 might be a great idea!

China

For what has probably been a decade or more, China’s currency – the Yuan – has been strengthening gradually. During a trip to Beijing in 2013, I lamented about how China then became much more expensive than during my previous trips in the early 2000’s. That is set to change as China’s central bank is lettting the Yuan depreciate due to a slowing economy.

For the first time in more than a decade, China will start to become cheaper again as a travel destination. Not that China has been an extremely expensive destination by any standards – but it was certainly headed there prior to last year’s devaluation.

Eurozone Countries (France, Germany, Spain, Italy, Greece, Portugal, Austria, etc…)

For a second year in a row, I am again including Eurozone countries into this list. While the Euro has weakened significantly in 2015, I believe there is still more room for that as their Central Bank continues to print extra money. The Euro may end the year at parity with the US Dollar (it is currently hovering at about USD 1.09 = EUR 1).

This is great news for those planning a Eurotrip in 2016. With oil prices at a low, it’s also easier to spot promo fares especially to European gateway cities such as Paris, Rome, Frankfurt or Barcelona.

Malaysia

This country has received quite a bit of bad press lately. While their economy actually isn’t doing as badly as the countries mentioned above, corruption scandals and sinking oil prices have helped make the Ringgit lose a sizable chunk of its value in 2015.

While I personally don’t expect the Ringgit to weaken significantly coming to 2016, a recovery does not look likely. Expect the Ringgit to continue hovering at about 4 to 4.2 to 1 US Dollar which is around 30% cheaper than what it was just a little over a year ago. Malaysia has become quite popular in the past several months for tourists from Singapore as the closely-watched Singapore Dollar to Malaysian Ringgit exchange rate breached 3 to 1 for the first time in 2015.

If you’re planning to visit Malaysia, you can consider heading out to check out the tourist spots in Ipoh – a mere 2 or 3 hours from KL – to experience a less-known side of this country.

Indonesia

Whenever there is a foreseen downturn in the global economy, Indonesia seems to be the country that reacts the most negatively. This was the case during the Asian Financial Crisis of 1997 and again in 2008-2009’s Global Financial Crisis. With the US hiking interest rates, Indonesia’s currency – the Rupiah seems to be quite prone to another bout of weakness coming into 2016. Indonesia has been a great value destination for the past couple of years. If you still have held out from exploring Bali or hiking up Mt. Bromo in Java, then 2016 could finally be your year!

Where to avoid if “relative value” is all you’re after

• With the strengthening dollar, the United States will be a more expensive place to visit for foreign travelers
• As a “safe haven” currency, the Swiss Franc will be the currency of choice if 2016 ends up being a turbulent year. If that’s the case, expect the Swiss currency to gain more ground in 2016, making Switzerland even more expensive (than it already is) to visit
• Again, with the “safe haven” perception, the Japanese Yen may actually appreciate in value this year – reversing the trend since 2013 of a cheaper yen.