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Does the dollar's sudden drop mean you'll have to avoid Europe this summer? Not necessarily. Even though you'll get fewer marks, francs or lire for your dollars this year than last, careful planning can stretch those currencies enough to compensate for the drop.

Here are a few specific ways you can cut costs and still enjoy Europe:

Before you leave, prepay your local transportation at fixed dollar prices. If you plan to use the train for travel inside Europe, U.S. prices for many of the popular European rail passes are set in dollars and aren't affected by the ups and downs of exchange rates.

Both Eurailpass and EuroPass are priced that way, as are some of the limited-region and single-country passes. Similarly, most of the big car-rental companies give you the option of prepaying your entire contract at a fixed dollar rate.

Look for fixed-dollar hotel deals. In previous years, several large European hotel chains offered fixed-dollar rates to American travelers. So far this spring, the only one I've seen is from Sofitel, which promises rates of either $118 or $138 per night at all its European locations.

While those rates are hardly in the "budget" class, they're considerably lower than the chain's regular prices. Look for similar offers from other chains over the next several weeks.

Move a bit down-market for your hotel accommodations. Europe is one of several places in the world where you can downgrade your typical hotel category a level or two without sacrificing much in the way of comfort.

If you're used to staying at Hiltons and Inter-Continentals, for example, you won't suffer unduly if you move down to the level of Sofitel or Mercure. And if you usually stay at a Novotel, you won't feel out of place in an Ibis.

But beware of one consequence of the down-market strategy. Even in Europe's hotter countries, you usually have to stay pretty far up the ratings chain to find air-conditioned rooms. Although some mid-priced hotels will keep you cool, air-conditioning is by no means as pervasive in Europe as it is in the United States.

If you're heading for Italy, Spain or southern France, take a close look at the guidebook or directory listings to make sure that any mid-priced hotel you're considering has air-conditioned rooms.

Move a bit down-market for your meals. While eating in Europe's name restaurants may be fun, it's easy to bust just about any travel budget by hitting only those "Best in Town" places you read about in the slick travel journals. Throughout most of Europe, ordinary restaurants turn out excellent fare for a substantially lower price.

Go to small cities and the countryside. As you know, you can stay in Rochester, Des Moines or Little Rock for far less per day than you have to spend in New York, Chicago or San Francisco. That same principle works in Europe: You can save on both hotel and restaurant costs if you spend as little time as possible in London, Paris and Rome.

Play the discount game. Even if you don't usually get involved with discount coupons and other deals, try them in Europe. "Entertainment Europe Hotel Directory," for example, has 50 percent off offers at hundreds of hotels.

The same publisher offers several individual-city discount books with discount coupons for hundreds of restaurants. For more information, write Entertainment Publications at 2125 Butterfield Road, Troy, Mich. 48084.

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