With the dollar strong against the euro for the first time in two decades — dipping briefly to a one-to-one status in July — Americans have been flocking to Italy this summer with wallets at the ready.
Despite skyrocketing prices on airfare and accommodations (blamed on unstable fuel prices, mass flight cancellations and supply chain issues), many travelers see the favorable exchange rate as a way to offset the higher flight and hotel costs. The healthy greenback seems to give some Americans an incentive to splurge a little — splashing out on everything from high-end Italian brands to fine wines to meals at Michelin-starred restaurants.
Gianluca Picciaia, co-owner of Bar Sant’Andrea in Orvieto, has personally noticed significantly more Americans in town over the last couple of months. “Last year we had a fair amount of tourists, but they were mostly from Europe,” he says. “I’ve definitely seen a shift in the percentage of visitors from the United States this summer. They’re spending. There’s no doubt about it.”
So, why has the dollar rallied all of a sudden? According to The Economist, it’s due, in large part, to the US Federal Reserve’s raising of interest rates in March. In an effort to tamp down inflation, the move created an attractive climate for investors who, at least for the moment, see the United States' well-regulated money markets as safe havens. In general, a country with higher interest rates has a stronger currency.
Where can Americans traveling in Italy find the biggest bang for their buck? When we looked at the Pasta Index — and by that we mean anecdata culled from the Italy Magazine staff's collective carb habits over the years — we see that in 2018, the price for a plate of spaghetti alla carbonara in Rome cost around $15. Today, that same dish of noodles goes for about $12. While a few euros on a bowl of pasta may not seem like a big deal, the savings over a two-week holiday can really add up.
And when it comes to purchasing luxury items like a Gucci purse, the discounts prove to be even more dramatic. For instance, retail prices for a handbag at the famed Italian design house range from €1200 to upwards of €6,000. This could mean a savings of hundreds of dollars on a single pocketbook. When you factor in the additional VAT refund of 22 percent (a sales tax redeemable at the airport upon departure), that’s nothing to sneeze at.