The speech referenced in the article below and other speeches from
Travel Weekly's Euro Conference are available in their entirety,
exclusively on Crossroads.
NEW YORK -- "What
is the big deal about the euro?"
This is what many friends and colleagues asked when Travel
Weekly proposed a conference on the subject for the travel
industry. "After all, it's just another currency," one industry
If the speakers at Travel Weekly's Euro Conference proved
anything, it was that the single currency -- to be adopted by 11
countries on Jan. 1 and possibly by a few more countries, such as
the U.K. and Denmark, by 2002 -- is a revolutionary undertaking.
The revolution is reflected in the possibilities for the travel
industry, often contradictory, that could result from monetary
Consider these excerpts from the pages of this special report,
which reflect the Euro Conference's focus on agents and their
clients:U.S. agents won't be able to escape the euro, even in the
States, Simon Jarvis, Visa International's senior vice president of
global support services, told conference attendees. "Increasingly,
you'll be requested to pay for packages and services in the euro,"
Jarvis predicted."I do suspect [suppliers] will see this [the introduction of
the euro] as another opportunity to obtain additional revenue
either through a commission cut or through actual leveling up of
prices." -- Dan Maschoff, vice-president, international, BTI
WorldTravel Partners in Northbrook, Ill."So we want to know when they [suppliers] pay us commissions,
what the values are going to be [once the euro is introduced] and
how it will differ" from current practice.That's very important
when you consider that's our livelihood and our income we're
talking about." -- Allen Rich, president of Rich Worldwide Travel
in Harrison, N.Y.One European Travel Commission official in Brussels estimated
that the euro will increase arrivals from the U.S. by 5% over the
next four to six years, due to a possible drop in prices within the
The implications for the industry are daunting to some,
invisible to others.
Many agencies with a global presence have been hard at work
converting their accounting and computer systems to accommodate the
Hoteliers with European properties are faced with a similar
But Mr. and Mrs. Smith, going to Europe next year for the first
time, face their own set of challenges. In Paris, can they pay for
their foie gras in euros or francs? Why does the French .50 euro
coin look different from the Italian .50 euro coin? And will the
Smiths have to pay more to change dollars to francs, now that a
third step is required by banks and exchange bureaus?
It's likely that Mr. and Mrs. Smith will ask these very
questions of a front-line agent. And the Smiths are more likely to
return to the agent who might at least be familiar with the
dilemmas facing Europe-bound travelers over the next few years.
With all the talk I have heard from our conference speakers
about how the euro will make travel easier, it behooves agents to
know that for many Americans, who can sometimes have a myopic
worldview, nothing that is new is easier.
I asked one friend what she knew about the euro. "You mean that
Greek sandwich?" she responded. (She is otherwise very well
educated. I promise.)
Such reactions are important when you consider that my friend
might be frustrated if she visits Europe between January and July
2002, during which time both national currencies and the euro will
be legal tender in the 11 euro countries.
(The folks who will profit the most during this period are
manufacturers of calculators.)
Moving on to the big picture, an often-discussed issue in
European financial publications is pricing and how costs in the
euro 11 might change as a result of the new currency.
A euro Web site operated by the U.K., which will not adopt the
euro in the first round, makes a strong argument for the euro's
impact on pricing: "The euro will mean big changes for business
both within these countries and throughout Europe. For example,
there are likely to be: "Cheaper transaction costs -- countries in
the euro zone will not have to change currencies when doing
business with each other. Exchange rate certainty -- sharing a
single currency means countries in the euro zone will no longer be
affected by currency fluctuations when trading with each other.
Transparent price differences -- it will be more obvious if
different euro zone countries charge different prices for the same
goods and services."
Most predictions lean toward the theory of a price leveling
within the euro zone that would raise prices in cheaper countries
and lower them in more expensive nations, but the jury is still
out. Nobody has yet to answer the question that was the title of a
conference session: "Will a Big Mac in Portugal and Germany soon
cost the same?"
But several speakers did tackle the issue of price transparency
-- the apples-to-apples effect -- as it pertains to tour costs.
However, the euro's impact on Europeans is not waiting for
predictions. The day of Travel Weekly's Euro Conference, Nov. 11, a
friend in France told me his bank statement is now in euros and
French francs. "This is fine for me," he said, "but customers have
already lined up to protest what they perceive as the bank's
abandonment of French sovereignty."
How quickly Europeans accept the euro and the demise of their
national currencies will determine the pace at which restaurants,
shops and other touristic businesses allow for and encourage euro
payments. And if non-euro countries surrounding the euro zone
eventually accept the new currency, this will make travel more
convenient and affordable.
New currency raises tough questions
By Dinah A. Spritzer
NEW YORK -- If the euro were just another currency, as some
observers have put forth, its implementation would not raise the
following questions, many of which were addressed by speakers at
Travel Weekly's Euro Conference and in the pages of this special
report, and many of which cannot be answered until the currency
matures, perhaps three, six or even 10 years from now:Will the euro make Europe an economic dynamo, rivaling the U.S.
as a financial super state and thus permanently changing business
travel patterns and practices?Will Paris and Frankfurt leap ahead of London as centers of
finance, also raising the demand for accommodations in and
transportation to these cities?Will Great Britain become a euro country by default, even
though its government is fixed to a "wait and see" euro
policy?Will the euro lessen cultural differences between countries,
diluting national traditions that have helped make Europe the
world's leading tourism destination?Will countries outside of the euro zone, especially those in
the former Eastern Bloc, tie their currency to the euro and accept
it as legal tender within their borders? What will they gain or
lose from a price perspective as tourist destinations when the euro
is phased in?Could the euro lead to mass unemployment and social unrest if
the euro zone's companies consolidate -- as many economists predict
-- and countries are unable to increase social spending because of
fiscal restrictions placed upon them by the European Monetary
Union?Will U.S. travelers be able to take advantage of the new price
transparency that the euro will create, as European consumers
compare the cost in euros of everything from car rentals to
pantyhose?Will the new transparency place a downward pressure on air
fares within Europe, as price differences based on country of
origin and currency become obsolete?Will a strong euro mean higher hotel, food and entertainment
costs in Europe?Will agents and operators lose sales to the Internet, as
consumers get comfortable comparing euro-priced packages on
line?Who will pay for the multibillion-dollar cost of the euro's
implementation? Will you? Will your clients?How will the euro -- together with the Y2K debacle --
complicate technology systems here and in Europe?How will the anticipated initial volatility of the euro's value
against the U.S. dollar affect your clients and your business?Will the euro zone's national governments stick it out with the
euro when times get tough? The euro was ratified through a
tumultuous process in many countries, where only the slimmest
majority won out.
To hear a speech, click the speaker's name below. NOTE: This feature requires that you have the latest browser
software and/or the latest version of RealPlayer installed. The
free RealPlayer is downloadable from RealNetworks' Web site.Dinah
A. Spritzer, Travel WeeklySimon
Jarvis, Visa InternationalDan
Maschoff, BTI WorldTravel Partners