How Badly Will Exchange Rate Woes Affect Tourism Arrivals?

It is the strong U.S. dollar and its impact on the change rate between the dollar and other major currencies—not the hostility toward U.S. President Donald Trump—that presents the principal obstacle to sustaining or increasing growth in visitor numbers from key overseas markets in 2017 and in the short term future.

This is what the Inbound Report picked up during the RTO Summit West, produced by the NAJ Group —after speaking to a third of the 120 so U.S. travel suppliers who attended the event in Marina del Rey, California.

To be sure, the “Trump factor” is having a real impact on some markets, such as Mexico and Germany, but the concern over a weak Euro, Canadian dollar and Mexican peso is a systemic problem—one that seems to be non-partisan.

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These three currencies represent the medium of exchange for the USA’s largest three markets: Canada, Mexico and (taken collectively) continental Europe:

  • While the Canadian dollar, or loon, has begun to creep back up a little from its low point last year, it is still more than 13 percent lower than it was three years ago. This has resulted in a drop in inbound traffic to the USA from Canada of 4.5 million visitors since the loonie began its decline in 2013. That is a 20 percent drop-off. (For Canadian destinations and travel suppliers, the weak loonie is a boon, as the country is expecting its highest annual total ever of inbound visitation in 2016, once final figures are in,  from the USA and overall.)
  • In Mexico, where distaste for Trump is especially high, and where tourism officials work on both inbound and outbound  as well as domestic travel, the focus will be to bring U.S. visitors into Mexico and to encourage Mexicans to take their vacations within the country, the tourism ministry has said that it expects travel to the USA to decline.Francisco Madrid Flores, the director of the Faculty of Tourism at the Anahuac University, has forecast that, in 2017, travel by Mexicans abroad will decrease by two percent.
  • In the Eurozone, where tour operators seem to have adjusted to a euro that has been stuck at less than $1.10 for at least the past year, the forecast of theS. National Travel and Tourism Office (NTTO) has predicted virtually no growth in Europe’s top source markets in 2017—a minus one percent for Italy, a plus one percent for both Germany and France, and a plus two percent for Spain.

Source: http://www.traveldailymedia.com/, 14 February 2017

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