The dollar is poised to continue its downward spiral against the Euro this week as speculation abounds that subprime mortgage investments will hurt corporate earnings and overall U.S. economic growth. This is bad news for travelers to Europe who are likely to be hard hit by the devaluation of the dollar as they plan holiday excursions abroad this year.
This week alone, U.S. currency has lost 0.8 percent against the euro trading at $1.4294 per Euro as of Thursday morning. Meanwhile on Wednesday, the U.S. currency touched $1.4310 on Wednesday, the weakest since the euro's debut in January 1999. The previous record was $1.4283 set on Oct. 1. Worst of all, the U.S. currency has experienced a whopping 7.7% decline this year versus the euro.
The dollar’s freefall is reportedly starting to take its effects on future travel bookings as more and more Americans are beginning to look to Eastern European countries or the Caribbean which are less expensive as more viable vacation options. And why wouldn’t they?
According to an
ABC News report, a hotel room in Paris that might have cost $200 two years ago now costs $240 a night while a bottle of soda in Amsterdam costs close to $3. Now that’s pricey.
While some countries like the United Kingdom where the pound sterling is trading at over 2 to 1 to the dollar, are promoting cost-saving travel tips in online marketing campaigns, most European destinations have yet to address the potential implications a soaring Euro might have on the future of tourism.
For the time being however, American tourists are apparently just digging deeper into their pockets and continuing on with their holiday plans. Only time and a new economic forecast will tell if that trend will continue.
