Weak dollar good news for North America’s travel market

For those who see the silver lining in a dark cloud, here’s some good news: the weak dollar that has hovered about US$1.40 to the euro has helped promote tourism in two ways: by increasing foreign travel and by encouraging Americans to tend to travel more in the US.
 

The weak dollar is part of a shift in the global balance of spending power that will certainly have many long-term impacts in other areas in addition to travel. Perhaps the most dramatic sign of this shift came last November when the butt of snide American jokes, the Canadian dollar, surpassed the US in value for the first time ever.
 

The fall of the dollar means international travelers can get more for their money by spending it in the US. But it has at the same time discouraged US travelers from visiting traditional overseas destinations such as Paris, where tourisms has been declining since 2007.
 

“There are more Europeans coming to the United States. That will continue,” Arne Sorenson,  CFO of Marriott International said in a keynote address at the Global Travel & Tourism Summit in Las Vegas.
 

Some hotel industry executives said they are seeing particularly notable increases in travelers from Europe, where the common currency has risen against the dollar.
 

Some areas have benefitted by this more than others. Two obvious examples: California and New York City.
 

The weak dollar and a global recovery, aligned with a strong marketing push, have led to a large leap in tourism in the state of California, according to Caroline Beteta, head of the California Travel and Tourism Commission. She labeled them “platinum business.”
 

“They spend more money than domestic travellers and they travel off-peak,” she said.
New York City is drawing a record numbers of visitors. There were almost 50 million visitors last year, according to NYC & Company. Almost 10 million of those visitors came from other countries, many drawn by the weak dollar.
 

“The city is now very attractive from a tourist’s perspective,” William Dudley, New York Fed president, told reporters at a briefing.
 

Hotels, restaurants, and agents in tourist destinations are reporting higher numbers of international customers.
 

But the impact of the weak dollar does more than draw foreign tourists to the US. It is helping domestic travel as well. Marquee national parks such as Yellowstone and Yosemite are finding visitation is way upwards. As foreign travel has fallen, Yellowstone went from 3.1 million visitors in 2007 to 3.6 million last year.
 

But the domestic travel trend goes well beyond parks. More than US$700 billion was spent on US travel in 2009, with $610 spent by US residents, says the US Travel Association. Those numbers are going up, the association says.
 

The only down side to foreign visitors is that the US is still lagging behind other nations. Over the past 10 years, the travel industry says international travel to the US has increased just 2 percent.
 

Top industry executives have recently stepped up pressure on the federal government to ease restrictions on travel to the US, and speed up the time it takes to process visas.
 

“Flat wages and costly foreign exchange are disinclining Americans to travel abroad. But domestic tourism is booming,” writes Zachary Karabell in Time Magazine.
 

After traveling throughout the US with his family, Karabell concludes that the weak dollar is the “upside of a downside.”
 

It’s proof, he says, that “for a nation that is suffering, we still have an astonishing capacity to take vacations and spend.”
 

By David Wilkening