I am planning a trip to Italy and am curious if people travelling to Europe these days are seeing the exchange rate reflected in prices.

Theoretically, prices should be significantly higher for Americans traveling in Europe, but sometimes the merchants over there compensate for the rate fluxuations.

Just curious.

Thanks

KJH

I'm not sure if I understand your query, but the dollar decreasing in value in relationship to the euro means that it'll cost you more for goods and services than it used to, say, a year or two ago!

I can cite a few personal experiences, which of course is not comprehensive.

The cost of goods and services in Europe's euro land should remain relatively the same in terms of local pricing. If the situation were the reverse, that is, the dollar was gaining strength rather than being on life support, we would not be reducing prices over here in most instances. Why should we?

In the current situation, why should merchants in Europe feel sorry for us just because our currency falling off the table?

The only segment of the economy where I can see that there might be a decline in prices is in the hotel market in a few cities that have heavy American tourist traffic.

For example, I just looked at the Hotel Aiglon where I stay in Paris and the room that has a rack rate of 142 € is now going for 114 € during the summer, until September 2.
And, breakfast is included!! Never saw that before at the Aiglon.

However the Kleber,which is a fancy 3 star, has if anything raised prices, at least on the web site. There may be reductions if you call on the telephone. Bersolys seems not to have updated prices.

The Murat, which is a 3-star has cut prices to levels I never saw before:
70 € per night for a double.

The Muguet, which is probably the most discussed hotel on this forum in the 7th Arr, is pricing Tween rooms at 103 and Queen rooms at 103. I am not sure if I know what a Tween room is, unless it is a French spelling of Twin.

So I guess the answer is that in selected areas of the hotel market, there is some price cutting. On the other hand, summer is not a major business market for Paris and even a 10% decline in the American tourist trade is going to mean vacancies in many Paris hotels.

Come September, when the city returns to full activity and trade shows and business meetings pick back up to normal, prices seem be near normal levels. We may, however, need to wait and see.

I don't think I can detect any changes in the hotel market in Switzerland.
Grindelwald receives such an influx of tourists from all over, particularly Japan, that I doubt if there will be much variation in the pricing level.
I know the apartment that I have used for the past 5 years in Lauterbrunnen is still the same price as last year.

There was a picture in this mornings business section of my local newspaper that showed the exchange rates and what a exchange cambio was charging in Frankfurt.

The board clearly showed that it was exchanging Euros for $1.24! On Monday I was watching the closing of the Frankfurt Stock Exchange on CNBC and they were interviewing a currency trader and he clearly said that his expectation is for the Euro to continue to rise. He is expecting an exchange rate of $1.35 to $1.40, without the commission that you'll pay if you exchange in Europe. Stinking expensive!

As far as them, giving us a break, do you really think that they even care about us. Look at what they did to us in Iraq. They all think that we have plenty of money. They all understand that we will travel and spend, regardless of how expensive things get. Within reason, Americans really don't care of fluctuating exchange rates. Another $1,000 for a trip of a lifetime is fine for most of us.

For me, I just faxed the hotel in Austria, Rothenburg, and Dresden that I had booked for 10 days in August. I just can't see spending $1.40 for a Euro when in January 2002 I got an exchange rate of .87 at my grandmothers bank in Germnay. Last October, I was in Germany and Austria for another 2 weeks and I was getting an exchange rate of 1:1.

I can't justify spending 60% more than I did in January 2001 to buy a Euro!
I think I'll stay in the USA, head out to the Rockies to camp and raft a river for a week or so.

Anyway, to any one that is going, have a great time. Europe is the absolute best.

Let me ask you a question..

Let's say you ran a hotel in Milwaukee..do you give a flying you know what what the relationship is between the dollar and the euro? If a French person comes in to your hotel and wants a room and itcosts $70 why would you care how much it costs the French person in Euro? You think of everyting in ters of US dollars; French people think of eveything in terms of Euro..

Now if you want to argue the law of supply and demand, well maybe. If a merchant relies on American tourists and they are priced out of the market, then perhaps they might lower prices but that's no different than the hotel owner in Milwaukee lowering prices to attract business but it has nothing to do with the relationship between the dollar and the euro.

I don't think it's such a stretch (or in any way ethnocentric) to think that, perhaps, merchants, hoteliers, and others whose livlihoods depend--at least partially--on American tourist dollars would be at least a little inclined to offer reduced rates in an offer to offset the poor exchange rate between the Euro and the dollar.

I think that's what KJH (along with others on other threads) is asking about and getting so unmercifully chastised here.

If I WAS a hotel owner in Milwaukee whose client base was heavily European I was suddenly finding myself a low capacity, I would certainly want to know why. Furthermore, if I found out that part of the reason I was looking at a bunch of empty rooms (or tables or unsold goods, etc.) was due to a poor exchange rate, I'd certainly consider giving a 10% discount or something like that. THAT'S just good business sense.

KJH, I don't know the answer to your question. I just wanted to write and tell you that I don't think it's a bad question or anything like that. I think it's quite reasonable. I'm planning a trip to Europe for September. I'm also hoping very much that the Euro doesn't go to $1.40 by then. If it does, I will almost certainly have to cut my trip short by a few days--I'm on a pretty tight budget and that much of a decrease in buying power would adversely affect my plans. Now, if the proprieter of my hotel wanted to give me a discount on my rooms or something . . .

Jennie

Go to the UK; the relationship between the GBP and the USD hasn't chnged all that much

xyz123:

I will be stopping off in London for 4 days as part of my three-week trip. I've found the Pound to be comfortingly consistent . . . costly, but consistent.

Jennie

To answer KJH's question, it's possible that there may be some fluctuation due to the exchange rate these days, but it certainly comes down to supply and demand, as XYZ very clearly stated. While prices in Europe are higher, there is also a general decrease in tourism in Europe (and throughout the world), which is due largely to the very bad worldwide economy. So there is a chance that the hotels might be more flexible in their pricing; it doesn't hurt to ask.

The idea that European hotels should lower their prices simply because the exchange rate is bad for us (Americans) is just plain silly, though. That seems to imply, to me anyway, the attitude that all of Europe is our (American) playground, and they should be accomodating of us. Why should that be? Prices fluctuate from year to year, and simply because we've become spoiled by the very good rate (dollars to euros) for the last few years, does not mean it will last. It also doesn't mean that it's an act of greed, taking advantage of us Rich Folk overseas!

From the standpoint of European businesses, the poor dollar-to-euro exchange rate is bad news. Anyone in a business which exports is hurting, since we are less likely to buy from them with their higher prices. And it's also more likely that the European business community will be investing in our market, since our exchange rate is so much better for them, too.

The moral of the story: exchange rates fluctuate from year to year, and some years we do better and some years we don't. It's just the way it goes. So if you want to go on a limited budget, just eat out less, stay in cheaper places or go for shorter amounts of time. But don't forget that there have been years when the exchange rate was even worse than it is now!

Thank you, Jennie, and shame on the rest of you -- a fair question is asked, KJH gets bashed -- and most of the answers show that responders don't know much about economics or the travel business. If my business is mainly with locals, it's true that I don't care about international exchange rates. But if I deal largely (or significantly) with foreigners, I care very much. Why is the U.S. willing to let the dollar slide, after all? The answer is to make our goods cheaper to foreigners and thus improve our trade balance picture. So, if I am the foreign business person doing lots of business with Americans, I must at least consider the impact of a strengthening Euro.

Now look at the hotel business (which, I agree, is the one where adjustments should be the most obvious). Hotel has mostly fixed expenses (mortgage, taxes, etc.). It's variable costs (cleaning rooms and linens, perhaps providing breakfast) are relatively negligible. It is better to get someone in a room and make SOME profit over the variable costs than to keep prices high and have a high vacancy rate. Remember, Euro may be strong, but Eurpoean economies are at least as weak as ours, so they're not stepping up to replace American tourists -- thus, those in travel related businesses must find some way to respond.

For what it's worth, a week or two ago I checked on my hotels for upcoming Italy trip, 2 of the 3 had lowered prices from when I booked late last year. So regardless of what we say, they seem to have gotten the message.

Re: "The moral of the story: exchange rates fluctuate from year to year, and some years we do better and some years we don't."

That also depends on who the "we" is.

If "we" is American tourists in Europe, then we are not doing as well right now. However, if "we" is Americans exporting products to Europe, then we're likely doing better since our products are now cheaper for Europeans.

Some good observations here. If a merchant's business drops off significantly *and* the merchant's customers are primarily, or significantly, those with a weaker currency, then the merchant may indeed adjust prices in order to entice those customers.

Give up on Europe and travel to Australia. Your dollar has lost some ground - but is still doing remarkably well. And you (almost) speak the language!

Folks who bashed this message must know little about the laws of economics.

Historically, hotels and resturaunts in tourist areas do actually adjust prices based on significant currency conversions with a major country like the U.S.

In fact, that is why years ago when the dollar was very strong against many European currencies, people would go and find that part of their anticipated gain was covered up by increased prices.

I was just curious, in this age of the Euro, if folks had seen the opposite effect.

Hope that clarifies my request.

KJH

Just go to Europe and enjoy the trip.

I have been there with a weak dollar and a strong dollar. Enjoyed all the trips. If you try to make a decision on when to travel based on our currency you will stay home. I have never seen the locals drop prices in sympathy to the poor US traveler. They will keep all prices where they need them and you will buy with your exchange. It works the same in reverse over here.

Bottom line: Go, budget and enjoy the trip!

Some hotels may lower their prices if they cater to huge percentage of American tourists, but whether or not you understand economics, you also need to understand tourismm in Europe. They will also have lots of visitors from other EU countries so if that is the case, why lower prices to lure Americans if they can get the higher price from the Europeans? Not bashing, just explaining.

I rarely stay in hotels, usually prefering B&Bs so I can't speak to hotels. I can tell you that as the dollar has declined, the cost of B&Bs in Ireland has risen steadily without any consideration for the effect that it has on American's. The cost of food at restaurants has risen and the cost of rental cars have risen dramatically also. Generally, Ireland has shown no indication that they are concerned with the shrinking dollar.

Last year, very few of the B&Bs I stayed in were over E30. This year they all were and the standard price was E35. Only a few were less. The increase was 10-20% and the dollar had lost about 30% to the Euro in the same time, so the cost of the trip went way up in percentage points anyway. We bought fewer souveniers which defrayed the expense a bit.

Bill