U.S. cities enjoyed a tourism boom in recent years, thanks to the plunging value of the dollar. But as U.S. currency regains its strength and economies around the world falter, will U.S. cities remain a bargain destination?
New York City, the most popular tourist destination, received a record 8.76 million international visitors in 2007, the highest number ever. Los Angeles had 4.8 million international visitors and Miami counted a total of 5.5 million international tourists -- record highs for both cities.
There has been a large influx of foreign leisure travelers in the past few years because they could pay for a plane ticket, go shopping and do them relatively cheap. But in recent months, major currencies, specifically the euro and pound sterling, have started to deteriorate. This month, the pound hit a six-year low against the dollar.
"The mood is definitely less than positive for the fourth quarter," said Adam Weissenberg, vice chairman and U.S. tourism, hospitality and leisure leader at the accounting firm Deloitte & Touche.
As an example, hotels in Miami alone expect a 3 to 6 percent decline in budget revenues, compared to the same period in 2007. With pressures to attract more customers, the hospitality industry is bound to offer more deals and reduce its rates.
"The U.S. hotel industry is virtually frozen by the uncertain state of the global economy," Weissenberg said.
Research and trends firm Smith Travel Research said in an October report, "As the credit crisis continues to dominate headlines and water-cooler conversations, reality has set in within the hotel industry in the form of an unknown and impossible-to-predict, short-term future."
The retail industry is also expected to be impacted significantly. Not only are Americans planning to cut back on holiday spending this year, tourists will likely be shopping less, too. Visitors' bureaus are tweaking their marketing message to appeal to more budget conscious travelers, and shopping is not on that list.
Still, demand in New York City is expected to stay strong through the fourth quarter and next year, according to Chris Heywood, vice president of tourism at NYC & Co., the city's tourism marketing organization.
Miami and Los Angeles will also likely see stronger numbers for 2008, attributable to summer tourism, but there is concern that numbers will drop in the winter holiday season and next year.
"The economic challenges that international markets are feeling are having an impact on our destination and others and for 2009, there is some anxiety." said Rolando Aedo, senior vice president of marketing and tourism at the Greater Miami Convention & Visitors Bureau.
"There will be some softening, we are seeing it in all sectors, but we are holding our own better than others."
One of the reasons for the higher numbers overall could be that these trips were already arranged.
"It was a different story in September," Weissenberg said. "The perception at the time was that it is a U.S. problem, then what happened in October is that the crisis immediately spread to the rest of the world. It's clearly become a global problem very quickly."
But the financial climate does not mean that all is doom and gloom for the tourism industry.
Cities are hoping to create a new marketing message that appeals to two kinds of travelers -- high-end tourists and the budget-conscious.