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Benjamins, Dough, Moolah, Greenbacks...whatever you call it, the American dollar is on the rise. Why? There are many factors that contribute to a country's exchange rate. Ultimately, the higher the exchange rate the healthier the country’s economic health.
When traveling, however, travelers have to exchange their dollars for foreign currencies. Therefore does the buying power of the dollar affect international travelers? Through interactive graphics and careful analyzations interactive graphics editor Darla Cameron and Pulitzer finalist Dan Keating explain what the dollar can buy the American traveler in their Washington Post article.
When traveling, however, travelers have to exchange their dollars for foreign currencies. Therefore does the buying power of the dollar affect international travelers? Through interactive graphics and careful analyzations interactive graphics editor Darla Cameron and Pulitzer finalist Dan Keating explain what the dollar can buy the American traveler in their Washington Post article.
The dollar is worth 21 percent more than it was a year ago (2014) against the euro.
As the second most traded currency, 19 countries in the European Union use the Euro. Due to the ailing prosperity of the Euro, countries are suffering economic losses. Traveling to Europe is not only easier because the American dollar has strengthened but because the Euro has weakened. The affected European countries’ business are more willing to lower their prices to help bring in more travelers-revenue.
10 Biggest Hotel Price Declines: (1) Russia $80, -45 percent; (2) Ukraine $71, -38 percent...Instability and turmoil can have more drastic effects on currencies.
Considering the countries political instability, it’s no surprise that Russia and the Ukraine top the list of the biggest hotel price declines. According to the Washington Post, in the past year the dollar has strengthened 79% more against the Russian Rubles and 218% more against the Ukrainian Hryvni. The counties significant economic downturn was sparked by the annexation of Crimea. Since the event, Russia and the Ukraine have been on hostile grounds. Although Russian and Ukrainian hotel prices might have dropped, so have the countries' popularity amongst travelers. Thus, a country's political and social well-being also contributes to travel expenses.
Owner of the World Travel Service Denny Lewis... said that many kinds of travel do not have cost savings from the strong dollar.Any package trips marketed to Americans are already priced in dollars with prices set for the year, so fluctuations in the exchange rate do not change the price.
While it seems only logical that an American traveler would benefit from a strengthening American dollar, the reality is that business practices and self-interests interfere. Online and real (people) travel agents both set prices on predictions of the dollar’s fluctuating exchange rate. Following the laws of supply and demand, travel consolidators have acknowledged how a stronger dollar affects the quantity demanded - plane tickets, hotel rooms, and other tourist expenses - and set prices based on the expected changes of the dollar’s exchange rate. In order to take advantage of benefits of the strengthening dollar, travelers would have to book directly by eliminating a middle man - a struggle that some would rather avoid.
It is safe to conclude America’s strengthening dollar indicates the improving health of its economy, yet many travelers may not directly reap the benefits. Nonetheless, the stronger buying power of the American dollar or our Benjamins, Dough, Greenbacks -whatever you may call it- can purchase more vacation memories for less money.
FUTURE RESEARCH:
What would traveling to Cuba mean for Americans? What would the U.S. and/or Cuba gain from this new decision?
This seems related to a recent article I read: http://www.npr.org/2015/04/07/398123411/airbnb-anticipates-tourism-boost-with-launch-in-cuba
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