#travel to europe
Why 2015 Is Great for U.S. Travel to Europe
The economy favors American tourists as vacation time is at a four-decade low.
Americans, tired of the winter cold, will have an easier time vacationing in warmer climates in 2015 thanks to strong jobs growth. dropping oil prices and moves by regulators in the U.S. and Europe that may continue the dollar’s rising value against the euro.
The U.S. dollar on Friday was worth 0.84 euros, a rise in the exchange rate compared with a value of 0.73 euros on the same day in 2014, giving Americans more spending power when they travel to Europe. That trend is likely to continue in 2015, and is quite a reversal of fortunes for the euro that once enjoyed a much higher value against the dollar, says Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics.
“A couple of years ago Europeans would come to New York City and shop like crazy, but soon that could be the other way around,” Kirkegaard says. “I think the euro is going to decline further.”
This currency change is likely in part because U.S. and European economies are heading in different directions when it comes to controlling the supply of money through a process known as quantitative easing, which affects the value of currency. The European Central Bank governors reviewed options for quantitative easing during their meeting on Wednesday and are likely to announce a form of that policy during their meeting on Jan. 22, Kirkegaard predicts.
The U.S. Federal Reserve, in contrast, ended quantitative easing through government bond-buying in October and is expected to raise interest rates around June. This would encourage foreign investment in the dollar and raise the value of U.S. currency at the same time the value of the euro may shrink. With this change in currency values, countries such as Spain, Greece and Italy will become more inviting for Americans, since those nations have been enduring economic hardship, but are also warm locales with popular shopping, beaches and historic tourism sites.
Workers in the U.S. are overdue for a vacation after toiling to recover from the Great Recession. Americans are taking less time off than any point in the last four decades, averaging only 16 vacation days off in 2013, compared with an average of 20.3 days in 2000, according to a study conducted by the Oxford Economics for the U.S. Travel Association. The study conducted in October showed Americans failed to use a total of $52.4 billion worth of paid time off in 2013.
The recent plunge in oil prices to their lowest level since 2009 will also likely help Americans save at the gas pump and lead airline companies to charge less for overseas flights, according to data compiled by travel service Expedia and the Airlines Reporting Corporation.
“Another factor, especially in Europe, is the rise of low-cost carriers, which ‘unbundle’ amenities, and force the big-name carriers to do the same in order to compete,” according to the report published by Expedia. “Peak travel season to Europe starts in May…the best time to book international tickets is 171 days out, or a little less than six months ahead. Americans on average tend to book 31-90 days prior to Europe travel.”
European companies might also offer discounts to boost tourism in the wake of the recent terrorist attack in Paris against French journalists, says Jeffrey Eslinger, vice president of the Travel and Tourism Research Association.
“A slightly stronger dollar coupled with lower airfares during the shoulder and off-peak times make traveling to Europe more attractive than it has been in sometime,” Eslinger says. “If there are continued terror threats and related activity in Western Europe, we may also see some discounting to stimulate travel.”