Greece's debt and the bargain vacation

This Deal of the Day comes from Joan R. Magee at partner site SmartMoney.

Investors are on edge about Greece's ability to finance itself. Spain, Italy and Ireland are mired in debt woes, too. Could it be a good time to book a trip to Europe?

Not only is the dollar up about 7% against the euro since the beginning of the year -- making everything from baklava to Irish stout cheaper for American travelers -- flights and hotels to some of Europe’s weaker economies are looking like bargains. Greek hotels are at 2005 price levels right now, with some 1,200 hotels available in Greece slashing prices by up to 50%, according to Diego Lofeudo, director of marketing for Expedia Travel. On BestFares.com, a roundtrip flight to Dublin on Delta Airlines goes for $484, a savings of hundreds of dollars compared with a few years ago.

Of course, built-in demand makes June, July and August still relatively expensive, even in debt-ridden destinations like Italy. And the threats of strikes and unrest in Greece are partly what has helped drive prices there down. But now that the eurozone countries have come up with a bailout plan for Greece, you still can find savings, especially once you're on the ground, says Lofeudo.

Here's where to look:

Greece. Greece’s debt burden has hit $407 billion. That, along with protests and strikes in Athens, has dried up demand, says Lofeudo. “What indeed affects the business the most is not the macroeconomics, but the daily stuff,” he says. “This is the case for Athens where the chaos showed on TV affected booking behavior more than the macroeconomic reports.”

In Athens, the problem translates to four- and five-star hotels selling rooms at 20% to 50% off, according to Hotels.com (which is owned by Expedia). A standard room at the Marriott in Athens, for example, is $174, down from $250 before the unrest. Flights, too, have fallen. On BestFares.com, a flight from Dallas to Athens in May, leaving on a Tuesday, is around $1,022. Leaving from New York, the deal is even better: $796, down about $500 from the year before.

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A good rule of thumb when booking online is to click on the "check alternate nearby airport" tab to see if you could save another couple hundred dollars, says Tom Parsons, CEO of BestFares.com. And if news about potential political or social upheaval worries you, always check the State Department's Web site for potential travel warnings on various countries.

Ireland. Ireland was long lauded as the Celtic Tiger, but the debt the country borrowed to expand is now weighing it down. For now, Dublin deals can be found left and right -- at least before the summertime high season begins.

On BestFares.com, a roundtrip flight to Dublin on Delta is going for $484, a savings of hundreds of dollars compared with a few years ago. (One reason flights to Ireland are so cheap is that the fuel surcharge here is about $100 per flight, compared with about $280 elsewhere in Europe.) If you take a package deal, you’ll get a comfortable, but non-luxurious standard room at the Dublin Holiday Inn for six nights and airfare for $687.11 a person.

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Spain. Ready for some late-night tapas in Barcelona? Book quickly -- Spain’s government officials may be trying to get a handle on crisis borrowing, but the country is still popular with tourists throughout the year. Some of the deepest discounts can be found for cities like Barcelona or Madrid for weekday travel. A flight to Barcelona from New York in May, leaving on a Tuesday and coming back a week later, can be had for $524, including taxes, a few hundred dollars cheaper than two years earlier. 

Again, going for the package deal can lead to bigger savings.

A flight on Delta from New York to Madrid is $515, including taxes, with a six-night stay at a three-star hotel in Madrid for $983 total.

Italy. Mamma mia! With a debt load now at 115% of GDP, Italy’s $1.2 trillion economy contracted by 5% last year, one of the biggest drops in Europe. Still, the country is a magnet for travelers, especially during the summer. So if you want to take advantage of the low euro, travel before May 31, says Parsons of BestFares.com. A flight from New York to Rome in May, leaving on a Tuesday, is $596, down from $1,100 it would be just a few weeks later. Meanwhile, boutique and somewhat out-of-the-way hotels like the Duke Hotel in Rome offer 4 1/2-star accommodations for about $250 a night for a standard room, down from about $400 last spring.

Parsons also recommends looking at travel sites based in Europe, which carry intra-Europe deals that their American counterparts don’t. One such site is SkyScanner.net. If you're looking for more information on these European travel deals, Transitions Abroad can walk you through it.

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