Pricey Paris, Rome out of Reach
Dollar falls to new low against euro; travelers feel pain, but keep plans.
Oct. 18, 2007 — -- The value of the U.S. dollar continues to weaken, with the currency hitting a new record against the euro today.
One euro now costs $1.43. When the euro, now used by 13 EU nations, debuted in 1999, it was actually worth less than the U.S. dollar. The two currencies were near parity for some time before the dollar declined and the euro spiked in recent years.
Though today's new high is good news for companies that export goods, for most Americans it means that traveling abroad is going to be that much more painful.
A hotel room in Paris that might have cost $200 two years ago now costs $240 a night. That bottle of soda in Amsterdam is close to $3.
"There are a lot of comments upon returning about how expensive it is," said Mary Peters, owner of Friendly Travel in Alexandria, Va.
Peters said that the poor exchange rate really didn't hurt this summer's sales, but she is concerned about next summer's bookings.
"People that had planned to go went — a lot of moaning and groaning — but they did go," said Peters, who is also vice president of the American Society of Travel Agents. "I think next year we're going to find that people will take the inclusive tours as opposed to going on their own."
Mauro Galli, owner of TourCrafters in Illinois, has been working with an Italian tourism organization on a discount card for food and attractions to make travel abroad more appealing for Americans.
"A vacation in Europe is not a vacation you are going to take every year," he said. "The people who call for booking, they don't seem very concerned about the exchange rate."
At least yet.
Diane Clarkson, a travel analyst with JupiterResearch, predicts an impact on the industry, but said since this latest run-up occurred after summer trips were booked, the effect has been muted.
"The impact is not as great as it might have been happening in March," she said.
Still people are taking note as they think ahead to next summer or even destinations in the Caribbean that aren't pegged to the U.S. dollar.
