Economic bright spot: bargain-hunting foreigners flocking to US
| New York
The truthful international traveler will acknowledge that of America鈥檚 many attractions 鈥� hamburgers, shopping malls, the Statute of Liberty 鈥� its cheap prices spurred by a weak dollar are among the most enticing.
鈥淲e are thinking we are lucky to come here, because it鈥檚 so cheap now,鈥� says Naoko Yamanaka, a visitor from Tokyo, before biting into a Big Mac in Times Square.
The dragging US economy of recent years has brought the value of the dollar down with it. That presents its own set of problems, but it has actually benefited the economy in at least one respect: Foreign travelers are lured to the US, where they can expect to get a bigger bang for their euro, franc, and yen.
鈥淚f the dollar鈥檚 down,鈥� says Joel Naroff, president of Naroff Economic Advisors, 鈥渇or those foreigners whose currency has gone up, that鈥檚 like getting an automatic discount on the price.鈥�
The dollar hit 75 on the US Dollar Index Friday, nearing an all-time low of 70, says Kelly Loeffler on Intercontinental Exchange. While the dollar has rebounded slightly since hitting a three-year low in May, the faltering American economy and concerns about the US budget deficit continue to keep the greenback at historically low levels.
Meanwhile, several foreign countries have seen their dollar exchange rates improve in the past year. Currency from China, Brazil, Australia, Great Britain, Canada, and the European Union is worth more in the US this year than last, says Shane Norton, a director at IHS Global Insight, a forecasting and consulting firm in Lexington, Mass.
With the value of their currency up relative to the dollar, visitors from countries with favorable exchange rates are enjoying outlet-mall prices, says Mr. Norton. 鈥淵ou鈥檙e getting deals that you certainly haven鈥檛 seen in a while here.鈥�
International travelers have caught wind of the bargains.
Demand for US hotel rooms is at a record high, says Jan Freitag, a senior vice president at Smith Travel Research, which has tracked hotel occupancy rates since 1989. More than 1 billion America hotel rooms were sold between June 2010 and May 2011 鈥� the highest number on record, says Mr. Freitag.
鈥淭he weak dollar makes the East and West Coasts of the US very, very attractive for the overseas traveler,鈥� says Freitag.
Even better for the US economy, foreign visitors are leaving more dollars in American cash registers this year than last.
鈥淥nce they get here,鈥� says Norton, 鈥渢hey can spend more than they did last year without dramatically increasing their travel budget.鈥�
One way to think about tourism鈥檚 economic boost is to imagine exporting goods to foreign consumers 鈥� without sending the goods anywhere. 鈥淭hey do the shipping by putting their bodies here,鈥� says Mr. Naroff.
According to Global Insight's Norton, China, Brazil, Australia, and France are among the nations that sent more visitors to America this year than last. Japan sent fewer, especially after the earthquake and tsunami in March.
Increased spending by international tourists means more jobs for Americans.
During the first half of the year, the travel industry added some 75,000 jobs 鈥� about 10 percent of all jobs created in the US during that time, says David Huether, senior vice president of economics and research at the US Travel Association. Overall, tourism jobs have grown about 1.7 times faster than those in the rest of the economy since the labor marketed bottomed out in February 2010, he says.
鈥淚n a sense, they鈥檙e a stimulus package that pays for itself,鈥� Huether says.
Still, some analysts warn that relying on a weak dollar to spur international travel to the US is a short-sighted business plan. Instead, the US Travel Association and other groups representing the tourism industry have pushed the Obama administration to ease restrictions on foreign visitors and to streamline the visa-granting process.
For her part, Ms. Yamanaka says she plans to make the most of her short time in the US before heading to Venezuela with her husband, Atsushi Yamanaka. Though the two have been in Manhattan for only one day, they鈥檝e already trekked to the SoHo neighborhood downtown and strolled along Fifth Avenue in midtown. Not coincidently, both areas are shopping meccas.
When the couple finished their burgers and fries Friday afternoon, Ms. Yamanaka said they were off to visit two of their favorite Big Apple destinations: Macy鈥檚 and Tiffany鈥檚.
