TOP OF THE NEWS
Weak Euro Curtailing Bookings to NYC, BOS, DC. MCO: The weakened euro has already made it difficult for receptive tour operators who sell to European operators. Inbound has received several anecdotal accounts to this effect—such as this comment from a well-known receptive in Florida: “Europe demand towards U.S. products (not just travel) is in a serious decline … this is in addition to the economic and political instability in the EU and the uncertainty resulted from it. When it comes to us, January was very challenging as we were working so much more just to keep EU numbers as they used to be, while giving up on substantial margins. Being the main-gate for EU traffic, NYC suffers the most, followed by Boston, DC and Orlando.”
In just a few weeks—that’s when ITB gets underway in Berlin—the inbound tour and travel industry in the U.S. will probably get a definitive reading on how well key source markets from Europe will be buying U.S. travel product for the remainder of 2015, as well as what product planners have in mind for 2016. Scheduled for March 4-8 this year, ITB is the largest travel show in the world. Travel suppliers from all over use the event as a platform for all sorts of announcements as well as an opportunity to exchange market intelligence and insights. In addition, travel and economic research groups release the results of numerous annual studies and forecasts. The setting should give us an understanding of the extent to which the weak euro has already affected, and will affect, travel plans to the U.S.
At one point last month, the euro had declined 20 percent against the dollar, year-over-year, plummeting to its lowest level since 2003. A number of factors contributed to the decline, not the least of which is the shaky state of Greece’s economy. Reports that a newly elected government in Europe would seek debt forgiveness and restructuring helped to send the euro to its more-than-ten-year low. But, by Feb. 4, the European Central Bank announced that it was providing Greece with a fresh infusion of credit. By week’s end, the euro had recovered slightly, but still 15 percent weaker than it was for most of last year.
Euro and the U.S. Dollar
Ten Year Changes† in Exchange Rate
|Year*||Euro = $||% Change vs. Previous Year|
* Rate struck at mid-day on Feb. 5 of each year†Ten-year change: -4.2%
Source: Prepared by Inbound (xe.com)