Weak dollar propping up US hospitality industry
Why is the US hospitality sector of the economy remaining strong? Perhaps in large part because of the weakening US dollar.
More than one report cites that reason.
Ernst & Young’s Global Real Estate Center was among those citing it.
“The continued weakness of the dollar is producing multiple beneficial effects on the US hotel market which is likely to continue for the foreseeable future and which may pull the sector through current recessionary pressures,” said Michael Fishbin, Ernst & Young’s US director, Hospitality & Leisure.
According to the report, international tourists are looking to the US as a prime vacation spot and are spending more money, often upgrading to higher-end and even luxury accommodations because their local currency now buys, in some cases, more than twice what it did just a few years ago.
Total arrivals in the US have witnessed 18 months of successive growth since April 2006, according to the U.S. Department of Commerce. In the first 11 months of 2007 international visitors spent $111.6 billion, up 13% from the first 11 months of 2006.
Mr Fishbin pointed to a parity between the US and Canadian dollars, which has increased Canadian spending power south of the border, and to the euro, which has strengthened from one euro per dollar to 0.66 euros per dollar in recent months.
The same exchange rate economics also benefit foreign business travelers who are now able to leverage the strength of their home currencies to take longer stays in the US, according to Mr Fishbin.
Report by David Wilkening
David
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