The dollar has been plunging in value steadily – some would say stealthily- for the past several weeks with the administration professing dubious indifference. Saturday’s Wall Street Journal had a blaring headline “U.S. Goes Along With Dollar’s Fall to Ease Trade Gap.” It is another matter that a declining dollar is likely do nothing to stem Chinese imports as the Yuan adjusts amoeba-like to the new dollar. But history shows that Convention Bureaus that salivate at the prospect of increased inbound tourism in the aftermath of a weak dollar are living on false expectations.
When compared to the Euro (since its inception in 1999) the dollar is at a historical low of nearly $1.30 to the Euro. The European Central Bank’s exchange rate chart shows that the dollar was at its historical summit (0.82 to the Euro) in 2000 when tourism was booming with the greenback’s strength doing little to deter European travelers and others from visiting the US.
In the end, while the US administration may secretly (and mistakenly) be hoping for a quick panacea for the country’s trade ills via a weak dollar, its laissez-faire approach does nothing to shore up foreign arrivals in the US. What does promote foreign arrivals is an aggressive marketing effort and a presence in all tourism related events around the world. With distances becoming a non-factor and Europeans (and others) increasingly choosing destinations like Dubai instead of the US, it’s time to acknowledge that the US is no longer a “natural” choice for the world’s rapidly growing and mobile middle-class. In a competitive market place, just as hotels compete for market share, the US needs to do the same – in a hurry.