Whatever it was—the environment of New Orleans with its unique kind of bonhomie, the apparent conviction among international visitors to that the USA remains a safe place to visit, or the desire of American tour and travel sales and marketing professionals to score large at the industry’s annual “Big Dance” … or something else—this year’s IPW generated both the expectation that next year will be a good year for the U.S. inbound tourism industry as well as an overall good vibe. What follows are highlighted points and themes selected by the Inbound Report team that covered the event and spoke to scores of buyers, suppliers and some other journalists from the start of registration on June 18 to the celebratory evening function of June 22 and on to the morning of June 23 as tired, glaze-eyed delegates who resembled background actors on the set of “Walking Dead” made their trek to New Orleans International Airport in order to return to points across the world
2016 IPW—The strong U.S. dollar? No Matter. “It’s going to be a good year,” Peter van Berkel, president of Travalco USA, told us. A receptive tour operator headquartered in the Miami area, it sells to key Eurozone source markets, including Germany, which is the largest source market economy using the euro.
At last year’s IPW in Orlando, the prevailing wisdom seemed to be that a flat year—or one with negative year-on-year growth in international arrivals to the USA—was in the offing because of the strong U.S. dollar. Two years prior to IPW in New Orleans, the dollar was trading at $1.36 vs. the euro. By last year’s IPW in Orlando, it had fallen to about $1.12—a drop-off of 18 percent. Since then, however, it has remained at about the same level.
When asked at a packed news conference if the strong dollar would be a disincentive to travelers looking to book travel to the USA, Fred Dixon, president and CEO of New York City & Company, responded simply, “no,” and then added emphatically, that, as a matter of fact, New York should experience healthy increases, year-on-year from international source markets for the years ahead. International visitors, he said, “might be spending a little less once they’re on the ground … but they’re still coming.” Many in the room full of 250 or so journalist nodded in agreement.
In conversations with more than 40 destinations, suppliers, operators and other journalists, we asked the same question, and no one thought that the strong dollar would have a negative impact, nor had the issue come up during business appointments.
(Only in the case of Canada, where the Canadian loonie went from about 95 cents to the dollar down to 69 cents a year ago and was hovering at 77 cents during IPW in New Orleans, is there clear evidence of serious decline in arrivals to the USA—off 10 percent, or 2.3 million visitors, in 2015—because of the strong dollar.)
Van Berkel suggested that, in essence, the playing field had leveled off this year. Last year, there were some operators who had product they had contracted for when the euro was much stronger against the dollar. With a weakened euro, they were able to sustain sales last year by discounting their product (a practice employed by the largest German tour operators). Now, he explained, those inventories were sold off and all operators are working with a euro that has remained at about the same level for a year.
The only sub-segment of the travel market in Germany that might have actually forsaken a long-haul holiday—say, to the USA—because of an unfavorable exchange rate comprised those consumers who are at bottom of the middle class income group for whom a shift in the rate just might make the difference. Long-haul travel is really luxury travel, van Berkel pointed out, and those who book such travel are not about to be affected by a currency exchange rate shift.