If you stick to one region of this vast continent – which for many other reasons is recommendable – yes, it can be a quite affordable vacation. A prime example of a region to visit is Peru. The distances between the myriad of Peru’s interesting sites are short. And you would only need to fly domestically if going to the Peruvian Amazon, or traveling directly from Lima to Cuzco. The cost of living is also very low. Prices naturally rise as the level of comfort increases.
Bolivia and Paraguay are other countries that tend to be less expensive. Traveling through Brazil can also be quite affordable as the cost for domestic flights is low, including the 4-hour flight from Rio de Janeiro to Manaus in the Brazilian Amazon. Major cities of South America, such as Rio de Janeiro and Santiago de Chile, can be as expensive as most major world cities – depending of course on the current exchange rate.