Tourists pause to view the Statue of Liberty from a Liberty Island ferry boat at Battery Park in New York, September 30, 2013. REUTERS/Mike Segar
August 11, 2017
By Peter Szekely
(Reuters) – Toshi Sugiyura and his wife Naka had a pleasant surprise awaiting them in San Francisco when the couple arrived from Japan on an anniversary trip, thanks to the U.S. dollar’s months-long slide against the yen.
The 37-year-old business owner from Nagoya said the stronger yen gave them more dollars to buy gifts for their children.
“If the dollar keeps going down, maybe we’ll go to Hawaii,” added Naka Sugiyura, 41.
The dollar’s declining value this year is giving foreign visitors like the Sugiyuras unexpected purchasing power and will likely increase how much they spend on their holidays, travel experts said.
Solid gains by the euro, British pound, Chinese yuan and other major currencies against the dollar since the start of this year have been too recent to affect most travel decisions. Tourists typically lock in vacations months or even years ahead of time, experts said.
But travelers who had already booked for this summer are finding their home currencies are stretching further than six months ago.
“We could see more spending by those who already planned to come,” said economist Adam Sacks, president of Tourism Economics in Philadelphia.
Brian Yong, a 45-year-old information technology engineer from Shanghai, said the yuan-friendly exchange rate made his two-week stay in San Francisco a better bargain and would let him to do more shopping.
“Lots of Chinese come here because of the exchange rate,” Yong said.
Foreign visitors make a big contribution to the U.S. economy, with 75.6 million of them spending $244.7 billion last year, the Commerce Department said. Foreigners spent nearly $84 billion more than Americans spent in other countries.
MORE TO SPEND
In New York City, by far the most popular U.S. destination for foreigners, officials hope stronger foreign currencies will translate into extra dollars for shopping, even if only at the margins.
“It could be the difference between buying an extra pair of shoes or not, is what it comes down to,” said Chris Heywood, spokesman for the city’s tourism agency, NYC & Company.
Since the beginning of the year, the dollar has lost 9 to 13 percent of its value against the euro, Mexican peso and Australian dollar. It has weakened more modestly against the British pound, Chinese yuan, Japanese yen, Brazilian real and Canadian dollar.
The trend means that a $300 hotel room, for example, would now cost a European about 256 euros, as opposed to 285 euros in early January.
That said, the “feel good” factor is often subjective and currency-specific.
“I’ve noticed the euro has been getting stronger but it seems like it was stronger when I was here almost seven years ago,” said Vera, a 25-year-old from Cologne, Germany, who is spending the summer in New York and declined to give her surname.
In fact, the euro was stronger seven years ago. It has lost about 14 percent of its value against the dollar since Oct. 1, 2010, despite its rise since January.
Regardless, Vera said she had spent more money on jeans than she anticipated, “because clothes are so much cheaper here.”
Although foreign travelers make up only one in five of New York’s visitors, they accounted for about half of the $43 billion the city reaped from visitors in 2016, Heywood said.
“The international visitor stays longer and spends more when they’re here,” he added.
Mauro Antico, 49, of Turin, Italy, said he planned his week-long visit to New York with his family four months ago without regard to the exchange rate, but was pleasantly surprised by the savings after he arrived.
“We are planning to buy many things,” he said.
(Reporting by Peter Szekely in New York; Additional reporting by Alissa Greenberg in San Francisco and Taylor Harris in New York; Editing by Frank McGurty)