Low Euro Driving European Arrivals
PHOTO: Shopping in Helsinki has been on the rise thanks to Baltic cruisers with high power dollars. (Courtesy of VisitFinland)
The negotiations to keep Greece in the Eurozone went through after 19 hours of haggling and will now rest on Greek Prime Minister Alexis Tsipras’ ability to get his government behind what is likely to be their best deal. Though the Euro dropped to $1.10 this morning when the news hit the streets, the currency has been oscillating between $1.10 and $1.15 for some time now.
Early returns on the negotiations show buoyant financial markets.
While the news of an even more anemic Euro can only be a catalyst for American tourism to Europe, spikes are hard to achieve when you’re already flying high. It’s not a boost that tourism to Europe really needed, as it’s been doing just fine on its own. In 2014, for instance, Europe led all international regions with 584 million international arrivals.
And the beat goes on. According to the latest reports from the European Tourism Commission (ETC), the latest data shows “solid growth” this year from both intra-regional and long-haul markets. The European Tourism 2015 – Trends & Prospects report confirms a “significant majority of European destinations registered positive growth in the pre-summer months.”
“In Austria there haven’t really been any major spikes and I don’t expect any this year, but the growth has been solid and steady, and I expect it to continue on that path,” said Michael Gigl, the regional manager of the Austrian Tourist Office for the U.S. and Australia.
In terms of arrivals, the fastest growing performers are Iceland (+30 percent), Montenegro (+19 percent) and Romania (+16 percent), followed by Ireland (+14 percent), Croatia (+14 percent), Slovenia (+10 percent) Serbia and Cyprus (both +10 percent). Ireland’s performance is especially impressive, as it is growing off of a very strong base line. Other countries that were already strong are such popular destinations as Germany (+5 percent), Spain (+4 percent), Italy (+4 percent) and the U.K. (+3 percent).
ETC economists are particularly upbeat about the U.S. thanks to a World Economic Outlook projection that saw “a solid (American) recovery with GDP growth expected to reach +3 percent in 2015,” as well as, “favorable financial conditions, an increase in power spending and business and consumer confidence beside low oil prices.” Low oil prices may be great for U.S. travelers, not so much for the Russian market, which “continues to face difficulties. The Russian Ruble even dipped against the low Euro.”
“There are still some limitations on American growth,” said Gigl. “Air lift is still limited. I’ve been flying a lot recently and it’s clear the airlines are flying with very high load factors. Still things are good. I just got an email from a very prominent hotel in Vienna and the U.S. market has become their top market.”
“It’s all good from Finland,” said Helena Niskanen, Visit Finland’s U.S. marketing representative. “We’ve seen that a Dollar with this kind of buying power is driving growth. You can find better deals and more people are traveling. We also see that day passengers into Helsinki from Baltic cruises are spending more money when they do their shopping in port.”
While Greece got a reprieve from the European bankers, some 17 percent of Greek GDP in 2014 was from tourism and many of the country’s top markets such as Germany, Scandinavia and the UK may be impacted by negative feelings over the crisis, which has pit the countries against each other in the European media. That could put the American traveler more in focus for Greek promotions, which over the last several years, seem more interested in Europe.
Another long-term impact of the Euro is suggested by Gigl who points out that, “It often takes six months for these sorts of things to show their full impact. Next year could really see a surge as tour operators reset their prices under the influence of the new Euro value. That could make 2016 a real bargain for travelers to Europe who travel with tour operators.”
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