Strong dollar has helped fuel U.S. travelers' interest in Europe

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Shopping on the island of Burano in the Venetian Lagoon.
Shopping on the island of Burano in the Venetian Lagoon. Photo Credit: Nicole Edenedo

American travelers are on a shopping spree in Europe this year, with the dollar reaching its strongest value against the euro in two decades amid a surge in travel to the Continent. 

Industry analysts say the dollar's strength helped fuel the already huge demand for Europe this summer, while travel advisors have been using it as a selling tool, telling clients that now is as good a time as any to take those delayed vacations, with Europe, essentially, on sale.

You're effectively getting a discount when your credit card bill comes in lower than you expected six months or a year ago.– Travel agency owner Nicole LeBlanc

"Clients have been especially excited to return to European travel this year after the long hiatus due to Covid restrictions," said Laurel Brunvoll, owner of My Unforgettable Trips of Gaithersburg, Md. "The strong dollar this year has certainly helped fuel the travel demand; Europe is much more enticing when the euro is more even with the dollar. 

"And shopping is a major component of many clients' vacations."

Strong demand for Europe travel started before the arrival of the lowest exchange rate between the dollar and the euro since 2002. Those bookings increased even more as the dollar grew stronger, and conversely, depressed travel the other way.

Felix Genatio, a senior business data analyst at Dohop, a travel technology provider, said that sales for flights from the U.S. to Europe from January to April this year were "roughly similar to demand for flights from Europe to the U.S. But from May to July -- i.e., the period when the dollar really starts rallying against the euro -- we saw U.S.-to-Europe sales go up by an impressive 113%, while the Europe-to-U.S. bookings only increased by 43%."

In July, Dohop data shows, there were 4.5 million tickets sold for flights to Europe from the U.S. compared with just under 3 million for travel from Europe to the U.S. "That's an unprecedented gap," Genatio said.

Spending more at the destination

Travel advisors say that American travelers don't appear to be making the trip across the pond because of the strong dollar but that it is resulting in a splurge surge once they are there, which spending data has confirmed. 

"As international travel has recovered over the last year or so, we have seen the total amount of money spent by Americans on holiday in Europe's top destinations increase exponentially," said Carlos Cendra, director of sales and marketing at travel intelligence provider Mabrian. "For example, for the year up to the end of July, spending in Barcelona and Paris is up by 659% and 529%, respectively, compared to the previous period, August 2020 to 2021."

Toni Lanotte-Day, owner of Toni Tours in Levittown, N.Y., said clients she took on an Emerald Azzurra sailing in the Mediterranean decided to stay longer overseas to do more shopping and take advantage of the better hotel rates because of the strong dollar. 

Aga Jones, owner of Aga Travel in Washington, said several honeymooning clients of hers who had booked trips in the spring for departures in the summer were able to reap the benefits of lower hotel rates once they were in Europe.

"For the activities and car rentals that were paid later, the exchange rate was definitely to their advantage," Jones said. "The couples that booked relatively last minute definitely got better bargains on hotel stays."

Nicole LeBlanc, owner of Mon Voyage in Dallas, said that even for trips booked some time ago, when payment is required in local currency at the time of travel, "you're effectively getting a discount when your credit card bill comes in lower than you expected six months or a year ago."

Analysts said that tour companies and other travel businesses are looking for bargains, as well. "Generally, at the trade level, we're seeing U.S.-located, dollar-denominated tour operators and other B2B 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 Shiji Group.

Christmas cruises, Christmas shopping

The strong dollar gives travel advisors another way to pitch holiday trips, with this year's holiday travel season expected to be the first major, uninterrupted one since the pandemic started. 

During a Folo by Travel Weekly podcast episode published Oct. 3 about this year's Christmas market river cruises in Europe, Jennifer Tombaugh, president of Tauck, and Lisa Fitzgerald, owner of Fitzgerald Travel in Spofford, N.H., agreed that the strong dollar was having an impact on travelers.

"We are seeing an interest based upon the dollar overall, which I think is also helping offset some of the inflationary pressures that you see, as well," Tombaugh said. "So while things here can seem more expensive, they're cheaper abroad."

Travel advisors have some friendly advice for clients expressing such interest: "Make sure you pack an empty suitcase with bubble wrap and tape, because you're going to find a lot of things you're going to want to bring home," Fitzgerald said.

Tombaugh, a Christmas market shopper herself, wholeheartedly agreed and said the worst of the lost-luggage woes seems to be over. Still, she encourages travelers to use tracking devices like AirTags in their luggage for the season. 

"Pack an extra bag, enjoy the shopping and take advantage of the dollar, and throw in an AirTag," Tombaugh said.

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