Strong Dollar Is Shifting Tourism Patterns Between the U.S. and Europe

The U.S. dollar has appreciated in value relative to major currencies such as the euro, pound, and yen, and enhanced buying power for American tourists has been changing travel patterns. In late September, the British pound was worth as little as $1.035, “the closest the pound and dollar had ever come to parity,” according to the Financial Times. The pound has since strengthened a bit but remains unusually cheap, attracting U.S. visitors.

Between May and July – the period when the dollar really started rallying – U.S. to Europe travel sales went up by an impressive 113 percent, while Europe to US bookings only increased by 43 percent, according to Dohop, a travel technology provider.

“To put that in perspective, this meant that US to Europe tickets sold were 4.5 million in July, for example, versus just under 3 million for the Europe to US route,” said Felix Genatio, senior business data analyst. “That’s an unprecedented gap.”

The currency fluctuations have practical implications for the travel sector. One is a shifting balance of power in the middlemen who help with selling trips.

“Generally at the trade level we’re seeing U.S.-located / dollar-denominated tour operators and other business-to-business buyers of travel placing more bookings with European hotels because they can offer more competitive pricing than most other countries,” said Wolfgang Emperger, Senior Vice President at hospitality technology provider Shiji Group.”