Posted on 12/26/2004 4:48:00 AM PST by foolscap
LOS ANGELES (Reuters) - A weaker U.S. dollar is fueling pent-up demand for overseas travel to the United States, helping to pad the bottom lines of hotels and tourist attractions.
Exchange rates "are having a terrific impact on our business, particularly in east coast cities like New York, Boston and Orlando," Starwood Hotels & Resorts Worldwide Inc. (HOT.N: Quote, Profile, Research) spokeswoman K.C. Kavanagh said on Tuesday. "December has been packed with European travelers coming here to Christmas shop."
This year the nation is on track to post the first increase in inbound travel since the Sept. 11, 2001 attacks, according to the Travel Industry Association of America.
"What is fueling this is a combination of pent-up demand for travel to the U.S. and phenomenal exchange rates," said Cathy Keefe, a spokeswoman with the travel association.
The U.S. dollar is near an all-time low against the euro, which began circulating in January 2002, and is close to a five-year low against the Japanese yen. The British pound is trading at nearly two to a dollar.
"It's a big bargain to come out here. If you get a decent airfare you can go shopping and still be ahead of the game," said Dieter Huckestein, president of hotel operations owned and managed at Hilton Hotels Corp. (HLT.N: Quote, Profile, Research) .
He said business is up about 40 percent in Hawaii compared with a year ago, driven by Asian tourism, and hotel demand is also up substantially in New York and Florida as European visitors flock to the east coast.
After 2001, travel to the United States plummeted amid terrorism fears compounded by a worldwide economic slump, the build-up to the war in Iraq and the war itself.
The trade association projects that the nation will host 43.5 million international tourists this year, up 7.5 percent from last year. In 2000, the total of foreign visitors reached 51 million.
VISITS UP BY DOUBLE DIGITS
Through September, U.S. inbound travel was up 12.5 percent compared with a year earlier, while travel from Western Europe was up 15.3 percent and visits from Asia rose 22.5 percent Attendance has grown by double digits this year at Universal Studios Hollywood, according to Don Skeoch, the theme park's senior vice president of marketing and sales. "Demand is strong from our key markets of the Pacific Rim -- Japan, China, Korea and Australia -- as well as Mexico and Canada. We also do strong business out of the U.K.," he said. In addition to currency rates, Skeoch attributed the pick-up in international visits to waning terrorism fears and new movie-themed park attractions such as the Revenge of the Mummy ride.
Hilton's Huckestein said the absence of a big health scare, like SARS or the Avian flu, is also helping tourism to recover.
Marriott International (MAR.N: Quote, Profile, Research) is seeing a 30 percent uptick in European arrivals at its properties in San Francisco, and a 10 percent increase in New York, according to spokesman John Wolf.
"We're also allotting more rooms to overseas travel agents -- the folks who book package deals," he said.
The Marriott Marquis in New York's Times Square has more than 1,600 employees who speak 70 languages and dialects.
"It's been a very long recovery in international travel, but people are more confident now," said the Travel Industry Association's Keefe. "Not only are there more tourists, but they are spending a lot more money -- extending their trip, taking side trips and eating at more expensive restaurants."
But the biggest impact has been on shopping, which is always a big draw for international visitors, she said.
Every cloud has a silver lining...I spent a couple of months travelling in Europe a few years ago, when the exchange rate was bad from the dollar point of view, and every time I cashed the same amount in US dollars, it amounted to less in local currency terms. And then the next time I spent a few months there, it was just the reverse, the dollar was rising, and I got more local currency every time I got cash.
I guess it all evens out in the end!
The other aspect, often overlooked by the opponents of the weak dollar, is that it makes American made goods (those few we have left) more competitive in world markets.
I second that.
Have you considered opening a wine store in Europe and "importing" California wines. ;-)
I'd be willing to bet the majority of guests have better command of English than the employees :-)
Ouch! That is gonna leave a mark.
In the '80s things were the opposite. I was with the Air Force and lived off-base nead Madrid in my own 5 room furnished apartment for ~$165 a month. Living was good. A kilo of jumbo shrimp at the supermarket cost about $6-7. I traveled all over Europe on leave. At my discharge date I had over $10k in my bank account.
It is mostly european stuff that is more expensive, not asian.
But . . . but . . . . but, the German treasury fuhrer told us that a weak dollar was hurting the American economy and that this was a bad thing!!! And, he said that a weak dollar against the Euro was an even worse situation for America.
I guess a treasury fuhrer who oversees an economy whose strongest feature is an almost 20% unemployment rate would know better than us dumb Americans!!
(sarcasm off)
The flip side of this coin is that importers, like me, are getting killed. Those of us who import products are losing jobs hand over fist.Have you considered opening a wine store in Europe and "importing" California wines. ;-)
Be sure to stock some American kosher wine as well; the place should be a real hit with le french.
LOL, they still have a lot of (inept) Fuehrers over in Germany.
Well, or at least wanna-be's? :)
This is also true for companies that rely on raw materials or finished goods to produce their products in the U.S.
The good news, however, is that the Eurozone importers are the only ones really hurting. The Asian economies are all pegged to the dollar, so if you import from Asia, you're still flush.
I'm sure that comes as no comfort in your position, but I don't know what you can do to change it other than broaden your supplier base (since I don't know your product, can't suggest otherwise).
Hispanics send $150 BILLION back to mexico thats one of the reasons for the WEAK DOLLAR, they probably dont contribute to SS and probably dont pay taxes, the illegals are a drain on our entire economy!!
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