Top budget travel destinations for 2009

Budget Travel recently released its annual list of the top bargain destinations for the year. Here's a rundown of the list along with the magazine's reasoning on why these destinations are hot and cheap now. To read the full article—with tips on everything from events to restaurants in all 10 spots—click here.


1) Austin, Texas

For years, the capital of down-home cool (and Texas) has been working to become the nation's capital of pop culture—at least among cities of a similar size. This city of 1.6 million residents has succeeded in its mission, especially as a venue for indie rock, bluegrass, and country music. Its largest music festival is South by Southwest, a multi-day, 1,700-band extravaganza that draws serious music fans nationwide (sxsw.com, Mar. 18–22, 2009). Austin's economy, meanwhile, is well diversified between public and private sectors, which means that Austin is poised to weather the economic downturn reasonably well, says University of Texas at Austin economy professor Daniel S. Hamermesh. So it should be full speed ahead on spending for free and affordable cultural events. A bonus: In the past year, discounter JetBlue has added flights to Austin. Rival airlines are feeling the pressure to keep airfares low.

2) Washington, D.C.

It's not just the presidential inauguration, the Capitol's freshly minted visitor center, or the recently re-opened National Museum of American History—all reasons enough to drop by D.C. in 2009. It's also the built-in, year-round cost containment: Free admission to national monuments, the Smithsonian's many world-class museums, and the Smithsonian National Zoological Park make the capital a perennial choice for an affordable family vacation. (For other ideas, check out Destination DC's list of "100 Free (And Almost Free) Things to Do in D.C.")

3) Budapest, Hungary

Budapest has become the sort of expat haven that Prague was in the '90s, back before the Czech capital's cafés started charging $4 for an espresso and tour groups suddenly outnumbered locals. Recently, the U.S dollar has surged in hard-hit Hungary, gaining 30 percent against the declining local currency, the forint. In addition to savoring the city's glorious art nouveau architecture, anchored by the imposing Museum of Applied Arts in the center of town, you can shop in the well-preserved Great Market Hall, explore the miles of caves under Castle District (former hideouts for soldiers during wartime), and catch a show at the Hungarian State Opera House, where standing-room tickets go for only $2.

4) Reykjavik, Iceland

The dramatic collapse of Iceland's currency, the kronur, has hung a 48-percent-off sign on virtually everything for American tourists. A hot dog (an Icelandic specialty) in downtown Reykjavik, for example, runs about 210 kronur—that's $3.50 in U.S. dollars at last year's exchange rates, but about $2 today. Meanwhile, in a bid to lure tourists, Icelandair has recently rolled out steep airfare discounts. Published fares to Iceland for early 2009 are down 22 percent from a year earlier, says Expedia.

5) Mexico

Our southern neighbor has always been relatively affordable, but this year is special. The U.S. dollar's exchange rate against the Mexican peso is at its most favorable point in 15 years. Prices should be down across Mexico, including in high-profile destinations like Mexico City, Oaxaca, and Cancun. Resort destinations that have become newly popular, such as Riviera Nayarit and Puerto Peñasco (Rocky Point) should be positively cheap this year.

6) Berlin

It's the 20th anniversary of the fall of the Berlin Wall. Plus, the city's been on a long construction spree: Berlin now has one of the world's most dynamic skylines, thanks to innovative buildings such as the swoopy O2 World stadium and the city's vast, sleekly modern main train station. Despite all the moving and shaking, Berlin remains a bargain. Even in the financially flush year of 2007, four- and five-star rooms averaged €130 a night; comparable rooms in Paris and London priced out at more than twice as much.

7) Vancouver, B.C.

Americans heading to Canada finally have the U.S. dollar back on their side. Exchange rates have rebounded to 2005 levels. And fares into Vancouver for the first three months of 2009 are down 24 percent from a year earlier, says Farecast. Meanwhile, the city has been busy glamming itself up to prepare for February 2010, when it hosts the Winter Olympics. It's spent lots of money to retool infrastructure and unveil cool new venues. The Vancouver Convention and Exhibition Centre, for instance, is now topped with a six-acre rooftop garden of 400,000 native plants and wild grasses that are partly irrigated by a sophisticated rainwater collection system.

8) Cambodia

It's no longer a backpacker's secret. In 2008, the country drew about 2 million visitors, more than 10 times the number it drew a decade ago. Cambodia's still off the radar for most Americans, but it's poised to take the same path as its better-known neighbor Vietnam, which saw a similar number of visitors nine years ago and now draws roughly 4 million visitors annually. Look for independently owned guesthouses because the major resort chains haven't built much here yet; and by all means, go before the crowds get too thick.

9) Panama

Panama has led tourism growth in Central and South American countries for two years running, posting back-to-back 20 and 30 percent gains in 2007 and 2008, respectively. Last year, the country surpassed the one-million-visitors mark, welcoming 1.2 million leisure travelers. That's about how popular Costa Rica was in 1999—before it emerged as a solidly mainstream destination. Compared with Costa Rica, Panama has more animal species and a larger amount of preserved terrain filled with colorful macaws, monkeys, and endangered shore birds.

10) Hawaii

The Aloha State received positive, high-profile press coverage when president-elect Barack Obama recently visited, but it's still hurting from the downtown of the national economy. This always-popular destination saw about a 10 percent drop in visitors in 2008, a statistic that represents a tourism drought for Hawaii. Tour operators are responding by aggressively discounting un-booked rooms and car rentals and bundling them into packages. As we enter 2009, there are remarkable package deals, air inclusive, from both the west and east coasts.