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 -- The
changeover to the euro could lead to a reduction in prices of tour
packages and other expenses associated with a trip to continental
Europe, providing an opportunity for agents to stimulate sales to
That assessment came during a euro conference panel discussion
-- Euro Pricing Panel: Will a Big Mac in Portugal and Germany Soon
Cost the Same? -- during which tour operators and a hotel official
were generally bullish about the overall impact of the euro on the
"The big winner in this is the travel customer," said Ian
Taylor, vice president for corporate foreign exchange dealing at
Thomas Cook in Toronto. "They are not going to have to pay usurious
foreign exchange rates at airports and the rate will be far more
When the euro is fully phased in during July 2002, separate
currencies in the 11 participating nations will be history -- and
travelers will no longer have to calculate in francs, lire and
deutsche marks. When that happens, wholesalers will realize
"considerable savings" by doing away with separate accounts for the
various currencies that will be defunct, said Peter McCormack, vice
president of sales and marketing for New York-based Trafalgar
The simplicity could have a direct effect on package rates:
Currently, the expenses associated with currency conversions and
transfers in a multi-country trip account for up to 5% of the
overall price of a travel product, McCormack stated. "Hopefully,
we'll pass that on to the consumer," he said, adding that "tourists
will be the main beneficiaries thanks to increasing competition
among the providers of travel services."
As for agents, the panelists agreed that they stand to reap some
of these benefits as well -- and will also save costs when they,
too, no longer have to keep separate currency accounts for the
But to fully cash in on the phenomenon, travel agents need to
become "euro-knowledgeable," and to equip themselves to deal with
the transition period -- which begins when the euro is introduced
on Jan. 1 -- after which prices may be quoted in both euros and in
national currencies denominations for three-and-a-half years.
One of the main selling points to clients, said McCormack, is
that "it will be far simpler to travel, since you only to have to
take one currency" along on a multi-nation European tour. And
that's a benefit that will be appreciated by tourists who have
often been frustrated by a confusing jumble of exchange rates and
fees every time they cross borders.
If the euro leads to a decrease in travel costs, that could
encourage consumers to reinvest the savings in longer or more
expensive vacations, he added.
Agents can also create a new opportunity -- touting the
advantages of the single currency system to travelers who might
have hesitated to travel abroad in the past, said McCormack. "A
single currency will make those destinations even more attractive
to American visitors, particularly the first-time traveler who has
never been to Europe before."
One product, though, will be eliminated by the advent of the
euro: the currency packs that include small denominations of
currency for a range of countries that can be purchased in advance
of the trip.
One uncertainty still hanging over the travel business,
McCormack said, is how the transition will be handled in the U.K.,
which is not expected to join the euro zone until 2002 -- thus
putting a question mark over the biggest single market for U.S.
That means that some U.K. companies may advertise dual prices,
listed in both British pounds and euros, in order to better compete
with other European nations. The British department store chain
Marks and Spencer reportedly is already experimenting with just
such a two-tier pricing system.
For the U.S. market, though, the aim is to keep it simple and
for tour wholesalers, that means quoting prices in dollars wherever
possible. "Realistically, we can only sell a tour product in U.S.
dollars," to the American public, said Ravi Rao, president of Jet
Vacations. "So we [the operators] carry the risk" associated with
changing currency values, he said.
The "negative" for the first year or so into the transition, he
said, is lack of certainty over the dollar-euro exchange rate,
which won't be set until next month, even though tour operators
have already had to publish prices for 1999.
Hotels are also preparing for the introduction of the euro,
which will involve training sales and reservations agents and
numerous other adjustments in billing and pricing procedures, said
Gary Rosenthal, senior vice president of international lodging
finance for Marriott International.
He said that Marriott recently conducted a survey of customers
and found that many were not ready to receive price quotes or be
invoiced in euros. "There are people who are very ready to rock and
roll, and other people who will migrate over to the euro over the
next two-and-a half-years," he said. "It points out the need to
cross train our sales people to be able to deal back and forth
between the local currency and the euro."
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.Ian
Taylor, Thomas CookPeter
McCormack, Trafalagar ToursRavi
Rao, Jet VacationsGary
Rosenthal, Marriott International