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Weak dollar to benefit Hotel market
Report shows lodging to be beneficial
NEW YORK -- A weak US dollar may be the primary factor in the ongoing solid performance of the US hospitality sector, according to a report released by Ernst & Young's Global Real Estate Center.
"The continued weakness of the dollar is producing multiple beneficial effects on the US hotel market which is likely to continue for the foreseeable future and which may pull the sector through current recessionary pressures," said Michael Fishbin, Ernst & Young's US Director, Hospitality & Leisure.
International tourists are looking to the US as a prime vacation spot and are spending more money, often upgrading to higher-end and even luxury accommodations because their local currency now buys, in some cases, more than twice what it did just a few years ago. Total arrivals in the US have witnessed 18 months of successive growth since April 2006, according to the US Department of Commerce, and in the first 11 months of 2007 international visitors spent US$111.6 billion, up 13 percent from the first 11 months of 2006.
Fishbin pointed to a parity between the US and Canadian dollars, which has increased Canadian spending power south of the border, and to the euro, which has strengthened from one euro per dollar to 0.66 euros per dollar in recent months. The same exchange rate economics also benefit foreign business travelers who are now able to leverage the strength of their home currencies to take longer stays in US hotels, according to Fishbin.
"As long as this exchange rate bonus exists for non-US travelers, the benefits will be seen at hotels from ski resorts in Vail and Aspen to cruise ports such as San Diego, Seattle and Miami and traditional tourist and business destinations such as New York, Orlando and San Francisco," Fishbin said.
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