That is what is being predicted by American Express Travel Services. It looks like the European vacations will be very expensive even with the dollar gaining strength against the Euro,

American Express recently issued its annual business travel forecast. It foresees increases of as much as 6% in transatlantic business-class fares. Hotel rates, especially in major cities, also are likely to increase. AmEx predicts, for example, that London hotel prices — already so expensive that even the federal government allows $274 per day for lodging — will rise as much as 15%.

“It’s a combination of occupancy and capacity,” says Ruth Philpott, director of hotel procurement for EClipse Advisors, a division of American Express.

High demand from business and leisure travelers in major European cities, coupled with limited real estate for hotel development, allows hotel owners to charge top dollar — or euro or pound, since the American Express’ survey looks at prices in the local currency. This is an area where, for the first time in years, there might be some light for American travelers. via LA Times

The Clipper Cruise Line, the sailing ships that also serve as cruise ships, is offering a deal according to Frommers.  

Soft-adventure operator Clipper Cruise Line (tel. 800/325-0010; www.clippercruise.com) is offering discounts, including deals for single travelers, for a handful of itineraries in 2005 and 2006 in the Caribbean, Antarctica, Artic, Russian Far East, Southeast Asia and other regions. Double occupancy rates are lowered up to $4,000 (per cabin) and singles can save as much as $5,145 on a number of cruises aboard Clipper’s four small globe-trotting ships, the Nantucket Clipper, Yorktown Clipper, Clipper Adventurer, and Clipper Odyssey.(read more here)