Sri Lanka doesn’t really have a good infrastructure for budget travelers at this point. There are loads of nice hotels if you are willing to pay US$40 or more per night, but almost nothing below that except for a few hostels. I haven’t been to Palawan but I have been to Boracay and Palawan can’t be too much cheaper. Boracay doesn’t have many budget options either, so my guess is that Thailand or Cambodia is your best bet.
As for the Northern Lights, Iceland is one to consider, and its Aurora Tourism sector is pretty famous. You can get a cheap flight to Iceland from London or most other large cities in Europe, and it’ll cost about the same as a flight to Stockholm or Oslo. If you want to stay on the continent, I’d think about Sweden, even though Norway has more northern area. Both are very expensive, but Sweden is a bit cheaper and easier to get around in.
If you're determined to travel during the holiday periods, though, book your vacation flights, hotels, and cruise far in advance. If it works with your schedule, fly on Thanksgiving Day or Christmas day; those are the least crowded days of the holiday season. And if at all possible, avoid traveling during weekends, on the days right before or after the holiday, and late in the day. It's not only crowded at airports but also northern storms can wreak havoc and create weather delays that cascade across the system.
And if you are mostly interested in adventure and nature rather than cities, you might also consider India. The cities in India are complete insane asylums, but once you get outside of them it’s a beautiful country. The area of Kerala and its backwaters are a big highlight. They’ll remind you a bit of Sri Lanka in some ways, although things are cheaper and the scenery is quite different. The various beach areas of Goa, just to the north of Kerala, are also worth considering.
I think Sri Lanka would be wonderful for 2 weeks in December. The rainy season typically ends early in December, but even when it’s still going it tends to be quick downpours, as you are no doubt familiar with if you’ve been all over southeast Asia. Still at this point there are very few hostels with dorm beds and not even many cheap budget hotels, but at the age of 30 you are probably happier with normal hotels anyway. Value is quite good in Sri Lanka as long as you can spend at least US$30 or so per night, and hopefully a bit more. Food is also quite cheap in general, although there are still surprisingly few tourist-oriented restaurants in many towns so it feels a bit undiscovered. Just don’t spend much time in Colombo and preferably focus on the mountain areas, and I think you’ll love it.
We are looking to travel somewhere warm in December of this year, for approximately 3-4 weeks. We are originating from Canada – Alberta, to be exact, and have done a fair bit of travelling throughout our lives, however, we are now bringing along our 4 year old son. With that in mind, I suppose our biggest concerns are now flight durations and safety (in our younger years and without children, these weren’t so much a factor, but definitely are considerations now).
As for key events in December, I typically avoid those sorts of things myself, so I’m not a good source on that. I actually visited Rio de Janeiro during Carnival, by accident, and it drives hotel prices so high and also crowds that it’s probably the worst time to visit unless you specifically want to spend all night watching the parades. And Oktoberfest, as another example, literally triples the prices of hotel rooms in Munich, so it’s only worth it if you REALLY want to get involved in the Oktoberfest thing yourself. But plenty of other travelers love to go witness the biggest events, and I assume they love it, so there is no right or wrong.
Early in your message you say the last week of November, and then later you mention “late December,” so I’m not sure which it is. But if it’s late November, I think Italy could be a great option, as the weather there is still quite nice, at least in the south. You could go to Venice for a day or two and then Florence and Rome, and then maybe spend 5 or so days in Sorrento. I spent 5 days in Sorrento in mid November two years ago and the weather was very nice, even if it wasn’t warm enough to sit on the beach.
The subtropical climate of Hong Kong means that summers are particularly hot and wet, and spring is warm and humid. November is the sweet spot, with clear, sunny days and mild temperatures. During your trip, you'll want to take a traditional junk boat ride on the harbour (seen here) and check out the sweeping city views from Victoria Peak, which you can reach by tram. Another can't miss? Stockton, a hidden speakeasy-style whiskey bar in Central.
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