Skift Travel News Blog

Croatia will be joining the Schengen area in the new year. Starting January 1, travelers will be able to move passport-free between Croatia and the 26 member countries that make up the Schengen area.

The Schengen area comprises a pact between countries to remove border controls for those traveling between their territories. Croatia received unanimous approval to join the border-free zone from the 26 Schengen member states on December 8.

Croatian airports have until March 26 to lift their border entry measures. After March 26, flights originating from the Schengen member states arriving in Croatia will no longer be requiring border checks, according to Travel Begins at 40.

The official currency of Croatia will also be the euro on January 1. All ATMs in Croatia will dispensing euros by January 15 at the latest, according to Croatia Week.

The new Schengen membership and currency adoption are some of the latest milestones the country has completed to ease the movement of people between itself and rest of Europe. In July, Croatia opened the Pelješac Bridge, which has streamlined travel with Bosnia and Herzegovina. The European Commission invested $349 million to support the project, which amounted to 85 percent of its financing.

Booking Holdings is hiring rapidly at its new engineering office in Bengaluru, India, to work on new projects such as how to verify guest identification with machine learning and new products such as alternative forms of international payment to traditional credit and debit cards.

The parent company of Booking.com has about 20 employees at its tech center now but expects to ramp that up to about 100 by year-end, according to The Times of India. The business unit will work on how to use artificial intelligence and machine learning to better manage risks and hassles in travel transactions.

The company wants to verify IDs such as passports and driving licenses by linking the company to sources of identification data and using artificial intelligence and machine learning to scan these and verify identities automatically.

That is one of the projects that the Bengaluru office will tackle, Daniel Marovitz, senior vice president of fintech at Booking.com, told The Times of India.

The team will also look at possibly building a “foreign exchange card” as an alternative form of payment to a traditional credit or debit card. Today, many credit and debit cards charge a different, higher foreign exchange rate than the lowest available on the market.

The planned Booking.com product would attempt to offer a cheaper alternative. The ambition is for customers to use the card, which will come in physical and digital forms, for routine purchases and not just for booking a hotel. It may eventually enable customers to take advantage of buy-now-pay-later and other insurance-like products that Booking Holdings might operate on its own as a financial technology player.

Both projects fit with Booking Holdings CEO Glenn Fogel‘s vision for “a connected trip” that he laid out at Skift Global Forum in September (see video).

The news of the product testing and development dovetails with recent Skift Megatrends about the financialization of travel and how the rise of global mobile wallets are upending travel payments.

The U.S. dollar has appreciated relative to major currencies such as the euro, pound, and yen, and that dynamic has been changing travel patterns. American tourists enjoy enhanced buying power in Europe and Japan, while many foreign visitors find the U.S. off-puttingly expensive.

Look at U.S. government data to see the pattern. September data from the International Trade Administration (sourced here) shows a 2 percent increase in Americans going abroad compared to September 2019 before the pandemic, while there was a 27 percent drop in inbound international visitors in the same period.

Jan Freitag, Senior Vice President of Lodging Insights for STR and National Director, Hospitality Analytics for CoStar Group, summed things up in a tweet on Thursday.

Here’s that slide from CoStar a bit bigger:

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.”

American tourists are flocking to the UK over other European destinations, new data shows.

Post-Covid pent-up demand has collided with the strong dollar, according to the latest figures from travel agency Trip.com, with a 678 percent surge in searches for U.S. to UK flights in the first six months of 2022, compared to the same period last year.

Overall, its inbound transatlantic booking data showed actual bookings from the U.S. to Europe increased 246 percent.

Booking values are up by 37 percent.

Spain came a close second regarding consumer interest, with a 614 percent increase in flight searches from the U.S., followed by Italy (577 percent) and France (491 percent.)

Trip.com’s Americas chief said travelers appeared to be taking advantage of the weaker European currency.

“We believe the increased value of the strong U.S. dollar versus the weaker euro and fall in the value of Pound Sterling means that US travelers have so much more buying power in Europe, which has helped to mark the continent’s return once more as a major destination for the U.S. market,” said Rich Sun, Trip.com Group’s general manager for the Americas.

The difference in value translates to a 10-15 percent discount, compared to the same time last year.

American tourists to Europe have more buying power than usual, which means that the dollar can buy 15 percent more than a year ago. Visitors are spending on everything from wine to handbags. Here are some interesting statistics from The Wall Street Journal on Monday:

“Overall, travelers from the U.S. spent 56% more money in Europe in June than they did during the same period in 2019, according to VAT refund provider Planet. Richemont, which owns Cartier and watchmaker Vacheron Constantin, reported 42% higher sales in Europe in the quarter that ended June 30.”

—WSJ

The U.S. dollar’s value relative to the euro is the strongest it has been since 2002, the WSJ reported. The move by the U.S. central bank to boost interest rates has attracted some international investors, distorting currency markets.

The flip side is, of course, that the U.S. has become more expensive to most international visitors, holding back the recovery of tourism spending. The New York Times has a helpful infographic on which currencies are held back the most.