NEW YORK -- Business to Europe is booming this year, but agents are
divided on whether the dollar's favorable exchange rate in euro
countries such as France, Italy, Ireland and Germany is part of the
reason, retailers told Travel Weekly.
Those who believe that exchange rates may play a part in the
boom pointed to the lack of hotel space availability and shorter
lead time in the busy period when clients call to book their summer
vacations as evidence.
A few agents said the strong dollar also might explain why
people are increasingly asking for more upscale accommodations.
In contrast, despite the steady strength of the British pound
against the dollar, only one agent surveyed, who specializes in
Ireland and the U.K., said she noticed a smaller portion of her
business going to the U.K. this year.
Georgina Grogan of Atlas Travel in San Francisco estimated that
60% of her clients are aware of the favorable exchange rate in
Ireland.
She said that the clients most aware of the value tend to be
either returning visitors or native Irish. Grogan estimated this
year's business ratio as 85% Ireland, 15% U.K., compared with a 70%
to 30% ratio last year.
Her agency's overall business is on par with last year, she
said, although the busy period arrived two months later than usual,
in April and May.
"I think, in a way, it has shown that the exchange rate is
making a difference," Grogan said.
At the end of 1999, the British Tourism Authority (BTA) lowered
its projected estimated growth in U.S. travel from 5% to 3%.
According to a BTA spokesman, U.K. tourism was adversely
affected by anxiety about the millennium on the part of travelers.
The BTA's most recent statistics show 3% growth for the first two
months of 2000, according to a BTA spokesman, who added that if
growth continues at 3%, the U.K. will receive 4 million U.S.
visitors this year.
Many agents were emphatic that the strong pound is not steering
their clients away from the U.K. to other European countries where
they can get up to 20% more for their dollar compared with last
year.
Kathy Bissinger, owner of Bissinger Travel in San Francisco,
pointed to the high-end leisure market on which her agency is
focused as especially strong in the U.K., citing the popularity
this summer of Abercrombie & Kent's Royal Scotsman train tours
through Scotland.
The tour operator is 35% ahead in year-to-date bookings for the
36-passenger private touring train, according to an Abercrombie
& Kent spokeswoman. The train's staple four-night Classic Tour
is priced at $4,150 per person; two newly introduced two-night
tours are priced at $2,350 per person.
"Historically, the high end is less affected by the swings of
currencies," Bissinger said. "But we are just flooded with business
at the moment. I would say our business is up over 50% from last
year."
Europe accounts for more than half of the firm's business.
"A couple of years ago we were doing more of Asia than Europe,"
she said.
Joe Dimino, vice president of Patrician Journeys in Livingston,
N.J., said he believes that travelers are more willing to trade up
due to the good exchange rates.
"We're seeing more upscale travelers," Dimino said, "and it may
well be that [the value is] an incentive to them, and they may well
get a more upscale vacation because it's not costing them as much
as it would have last summer."
Dimino pointed to Austria and Ireland as hot destinations this
year and said his agency has "seen an increase in people who are
anxious to go to Northern Ireland" because of its increasing
stability.
"Our experience says everyone is interested in value," said Jani
Miller, president and chief executive officer of Central Travel in
Toledo, Ohio, which does about 15% of its business to Europe.
Miller called the favorable exchange rate "a huge positive" for
business to Europe. Some other agents, however, do not believe it
is making a difference to their businesses.
"I haven't had one person mention it," said Mary Peters,
president of Friendly Travel American Express in Alexandria, Va., a
small storefront agency in which business to Europe accounts for
65% to 70% of its revenue.
Peters said she noticed that hotel rates are down in Germany and
that "hotel space is hard to get."
"I'm surprised people aren't talking about it," she said, noting
that the relative strength of the dollar often would come up in
years past.
Peters pointed out that tour operators are not adjusting their
rates, either. Two U.S. ASTA chapter presidents questioned believe
the strong dollar is not directly boosting travel to Europe this
summer.
"More often than not, the consumer is more focused on the cost
of the airline ticket than the larger expenses incurred for food,
lodging and transportation," said Neal Kraemer of Carrousel Travel
in Minneapolis and president of ASTA's Upper Midwest chapter.
"I don't think the average person is aware of the value of
hotels and restaurants," said Helene Singer of Singer Travel in
Wyomissing, Pa., and president of ASTA's Delaware Valley chapter,
"especially since many are buying packaged tours, which are quoted
in dollars.
"[People on] FITs and upscale travelers are the ones who are
getting the value since they are paying in local currency."