End of the Tourism Boom?
U.S. cities become expensive for international tourists as dollar strengthens.
Nov. 20, 2008— -- 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.
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