New York? London? Moscow? Guess again…

Thinking about going traveling overseas this summer? If you’re American, you might want to avoid Japan.

New York? London? Moscow? Guess again…

Thinking about going traveling overseas this summer? If you’re American, you might want to avoid Japan. Not that Japan isn’t a great tourist destination—it is—but these days the strength of the yen might make even Bill Gates think twice before booking a trip.

In its 2009 cost of living survey of the world’s most expensive cities global human resources firm ECA International concludes that of the five priciest, four of them are in Japan, with Tokyo being the toughest on the wallet. However, Tokyo only ranks second overall. The most expensive city in the survey? Luanda, the capital of Angola.

What ECA did was to break down a basket of 125 consumer goods and services in 370 countries around the globe, and compared them to what comparable costs would be against major world currencies. They perform this survey to provide international companies with cost-of-living information for their workers living overseas but it can be just as relevant for travelers planning shorter visits as well.

Of course, some things cost more in some countries and less in others. In Luanda a can of soda averages only $1.30. In Tokyo it costs $1.75 but in Copenhagen it costs an eye-popping $2.12. But in Luanda the price of a quick lunch is the highest in the world, averaging nearly $58. In contrast, a quick lunch in Manhattan, the most expensive city in the U.S., averages a relatively modest $18.61.

Why are these countries so expensive? It has primarily to do with the high costs of shipping, fuel and fluctuating exchange rates. While the global recession may be showing some signs of easing, in Japan, for example, the yen soared against the dollar and other currencies. That slammed profits at Japanese exporters such as Toyota, Sony, and Panasonic. It also drove up the cost of living for expats and tourists alike in Tokyo and other big Japanese cities. Last year Tokyo ranked no. 13 and Kobe, which came in fifth this year, was no. 29.

In the past 12 months the yen has risen 8% against the dollar, according to ECA’s Lee Quane, who says people coming from the U.S, “will notice a considerable difference in costs compared with 12 months ago.”

But other cities saw equally dramatic shifts. In 2008, Manhattan came in at no. 84 and for 2009 jumped sixty-seven places to land at no. 17. Baku, the capital of Azerbaijan, rose eighty-nine places from no. 109 to no. 20, Shanghai rose to no. 28 from no. 111, and Hong Kong went from no. 98 to no. 29.

Some places got less expensive, though. Norway’s capital Oslo slipped from second overall last year to no. 7 in 2009, Moscow fell 18 places to no. 23, and Rome dipped seven rungs to no. 37.

Japan wasn’t the only country that dominated the top ranks. Switzerland also had four cities, with Geneva (no. 8), Basel (no. 9), Zurich (no. 10) and Bern (no. 11). Which country came last? Maseru, Lesotho.

Top 10 Most Expensive Cities in the World

1. Luanda, Angola
2008 rank: 1
Movie ticket (in US$): 16.85
Quick lunch (in US$): 57.92
Washing machine (in US$): 1090.47
Kilo (2.2 pounds) of rice (in US$): 5.65
Can of soft drink (in US$): 1.30

2. Tokyo, Japan
2008 rank: 13
Movie ticket: 19.16
Quick lunch: 16.48
Washing machine: 886.77
Kilo of rice: 8.45
Can of soft drink: 1.75

3. Nagoya, Japan
2008 rank: 20
Movie ticket: 17.46
Quick lunch: 15.33
Washing machine: 899.97
Kilo of rice: 8.80
Can of soft drink: 1.57

4. Yokohama, Japan
2008 rank: 15
Movie ticket: 18.48
Quick lunch: 17.11
Washing machine: 910.04
Kilo of rice: 6.28
Can of soft drink: 1.18

5. Kobe, Japan
2008 rank: 29
Movie ticket: 16.92
Quick lunch: 14.96
Washing machine: 588.32
Kilo of rice: 7.09
Can of soft drink: 1.38

6. Copenhagen, Denmark
2008 rank: 4
Movie ticket: 13.31
Quick lunch: 28.71
Washing machine: 1053.27
Kilo of rice: 4.24
Can of soft drink: 2.12

7. Oslo, Norway
2008 rank: 2
Movie ticket: 12.84
Quick lunch: 32.65
Washing machine: 808.01
Kilo of rice: 4.40
Can of soft drink: 2.07

8. Geneva, Switzerland
2008 rank: 6
Movie ticket: 14.07
Quick lunch: 27.57
Washing machine: 1213.67
Kilo of rice: 3.48
Can of soft drink: 1.02

9. Zurich, Switzerland
2008 rank: 8
Movie ticket: 14.11
Quick lunch: 21.56
Washing machine: 978.45
Kilo of rice: 2.79
Can of soft drink: 0.99

10. Basel, Switzerland
2008 rank: 9
Movie ticket: 13.73
Quick lunch: 21.15
Washing machine: 744.59
Kilo of rice: 3.01
Can of soft drink: 1.03

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