What Drives Travel Costs
Why does a day in Tokyo cost three times more than a day in Hanoi? Travel costs are shaped by a combination of structural factors. Understanding them helps you plan smarter and choose destinations that fit your budget.
Local Cost of Living
The single biggest factor is the local cost of living. Countries with higher wages, rents, and food prices charge more for services tourists use. This is why Southeast Asia and South Asia are consistently cheaper than Scandinavia and Switzerland.
Currency Exchange Rates
Exchange rates create relative value. When your home currency is strong against the destination currency, your purchasing power increases. This dynamic shifts over time and can make previously expensive destinations suddenly affordable.
Tourism Demand and Seasonality
High tourist demand drives up prices. Popular destinations during peak season charge premium rates for accommodation and activities. Off-season and shoulder season travel can offer the same experience at significantly lower cost.
Accommodation Type
Lodging is usually the largest single expense (25–42% of daily budget). The gap between a hostel bed and a luxury hotel room can be 10x or more. Your accommodation choice has the biggest impact on your overall daily cost.
Dining Habits
Food costs vary enormously based on where you eat. Street food and local restaurants can cost a fraction of tourist-oriented or upscale restaurants. Destinations with strong street food cultures (Thailand, Vietnam, Mexico) offer affordable dining at all levels.
Transport Infrastructure
Cities with good public transit (Tokyo, Berlin, Singapore) allow cheap movement. In cities without it, taxis and ride-hails add up quickly. Whether you need to rent a car also varies by destination.
Activities and Attractions
Entry fees for attractions, guided tours, and experiences vary widely. Some cities offer abundant free activities (parks, beaches, markets), while others center around paid experiences. Your interests shape this category significantly.
Use Our Tools
Our budget calculator accounts for these factors through city-specific cost models with style, season, and preference adjustments. Compare cities to find destinations that match your budget.