The U.S. hosted a record number of international visitors last
year, though a stronger dollar is making travel to the country more
expensive and could cloud the outlook for the tourism industry.
The number of international visitors to the U.S. rose 7% to
nearly 75 million in 2014, according to Commerce Department data.
Travel spending from overseas visitors also rose for the entire
year, though a month-by-month breakdown of trade data shows the
pace slowed toward the end of the year and spending fell slightly
in January.
That coincides with a rough ride for the Canadian dollar, the
euro and other currencies. In the past year, the euro alone has
lost nearly a quarter of its value against the dollar.
"We have seen across the globe a strengthening dollar," Jason
Kalisman, interim chief executive at Morgans Hotel Group Co., told
investors last week. "I think that does impact our European
travelers, especially [in] New York."
Morgans runs boutique hotels, including the Hudson in New York
and Delano in Miami Beach.
Adam Sacks, president of Tourism Economics, said the shifting
exchange rate started noticeably affecting tourism numbers in the
fourth quarter of last year. "And the effects are going to be more
pronounced in 2015," he said.
U.S. trade data show travel receipts--a category that captures
spending for business travel, expenditures by seasonal and other
short-term workers, and personal travel--rising a little over 2%
for all of 2014. But the pace slackened to less than 1%, compared
to a year earlier, in the final quarter of 2014. In January, travel
spending was down 0.7% year-over-year.
Separate calculations on personal consumption, which are
different because they include airfare but exclude medical and
student spending, show travel spending by foreigners down slightly
from the third to the fourth quarter.
Mr. Sacks still expects the volume of visitors to grow this
year, though not as much as it would have if the exchange rate
hadn't shifted. Visitors are also likely to spend less in dollar
terms.
"It's certainly a relevant economic issue right now," Mr. Sacks
said. "[Tourism] really is a significant share of the U.S. economy.
It's one of the only with a significant trade surplus."
Travel receipts count as an export. When U.S. tourists spend
abroad, that is an import. According to Commerce Department data,
the U.S. ran more than a $72 billion surplus in the category last
year. By comparison, the overall trade deficit was $504.7 billion
in 2014, a drag on top-line economic growth.
To be sure, the popularity of the U.S. and strong domestic
travel may outweigh any currency effects. Commerce on Wednesday
reported that domestic travel and tourism spending by Americans and
foreigners combined grew at an inflation-adjusted 4.5% annual rate
in the fourth quarter, compared with overall gross domestic product
growth at 2.2%.
And many overseas visitors appear ready to shrug off currency
fluctuations, at least for now.
"Thus far for us--and I've got to keep fingers crossed--but I
don't see any letdown so far," said John Loizos, general manager at
the Strand, a boutique New York City hotel. About 28% of the
hotel's business is from overseas, much of it booked up to a year
in advance.
"I think if there's going to be any indication things will
change, it's not going to be until 2016," Mr. Loizos said.
CityPass, a service that bundles admission tickets to top
attractions in a city, has seen a small decline in website visits
and orders for New York packages from France and Italy in the early
months of 2015, said Chief Executive Megan Allen.
"But France is still our No. 1 international country for New
York CityPass purchases," she said. "So it's a slight decline, but
only very slight."
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