What the U.S. Dollar and Euro Parity Means, and Doesn’t Mean, For Travelby Daniel McCarthy /
Last week, for the first time in two decades, the U.S. dollar and the Euro were worth the same amount, a significant event in the history of both currencies. The “parity” meant that, for the first time in the lifetime of some adults, an American dollar will go just as far in Europe as it would stateside.
That parity is clearly most relevant for Americans who are traveling to, or planning to travel to, Europe sometime this summer.
Here is how the exchange rate changes some signature pricing on European vacations:
- Tickets for a family of four (two children, two adults) with access lift to the top of the Eiffel Tower, which runs 26.80 euros per adult and 13.40 euros for children, would have cost Americans about $90 pre-pandemic in January 2020. As of Friday, because of the change in exchange rates, that would have cost that same group of Americans a little less than $79.
- Basic tickets for a couple visiting Rome’s Coliseum (16 euros each) plus dinner (25 euros per person) would have run Americans about $91.84 in January 2020. On Friday, that evening out would have cost Americans $80.36.
- A family of six, traveling to Europe theoretically dealing with the new European tourist fee, which goes into effect next May, would see that 7 euros charge cost them a little over $47 pre-pandemic. On Friday, if that fee were in effect, it would have cost them just over $41.
The savings might seem small, but add up over a long European vacation, especially the kind of trips that American groups and families tend to favor over a summer break (particularly post-pandemic). And travel advisors speaking to TMR about the news said that it is definitely catching the eye of consumers.
Internet searches for "euro exchange rate" are at a high, according to Google.
“The impact, right now, is just in consumer awareness about the exchange rates,” Kareem George, the principal at Michigan’s Culture Travelers, told TMR on Friday. “Clients are aware of it and it’s helping to push some people struggling to make a decision over the finish line.”
“People who have been waiting or saying all the cards have now aligned,” he added.
However, George added, when it comes to booking through suppliers, even the ones who are using local DMCs as part of their package, “things are pretty normal in terms of pricing.”
Suppliers talking to TMR who only price in U.S. dollars said the same, particularly as tight inventory, high demand, and airline availability and pricing continue to drive the market.
Brigitte Armand, president of tour operator Eurbound, told TMR that the parity has had “had very little impact on the package pricing.” Armand said this is due mainly due to airline prices that “have gone up substantially,” along with hotel rates, which have done the same.
“Hotels do yield management just like airlines do and as the properties are filling up, rates increase. It’s just plain supply and demand,” she said. “Perhaps clients will spend more once they are in Europe. Difficult for us to know this as we only deal with the travel agent.”
Jeff Roy, the VP of marketing and sales for Eurobound, told TMR that the impact, just like George said, is coming mostly in consumer awareness.
“US travelers are aware of the favorable exchange rate and believe traveling to Europe is less costly. So, on one hand the parity of the dollar to the euro is a help and on the other hand, inflation and demand is a hurt,” he said.
A spokesperson for Globus also said that it had not seen any differences in pricing because of the parity.
“Globus and Cosmos customers aren’t subject to pricing fluctuations due to exchange rates or changes in costs of services, as we set fixed pricing months in advance of the coming travel year. And all prices are locked-in upon deposit. So if land travel costs rise or currency changes for 2023, our customers will realize even more value in their touring dollar,” the spokesperson said.
And a spokesperson for Abercrombie & Kent, which caters exclusively to North Americans, said the same.
“For European travel in 2022, tight availability remains the challenge. The strength of the dollar is helping to offset some of the cost increases but inflation – particularly in the labor and fuel sectors – is driving significant price increases for travel in 2023 to Europe,’ the spokesperson said.