…
An important element in the outlook for the Asia outbound market is the decline in va-lue of the US dollar. It takes US$1.25 to buy €1, whereas in 2000 it cost only US$0.80 cents to buy that €1.
This means someone whose income is in US dollars or linked currencies must pay about 55% more when visiting Euroland.
(Currencies in Asia tied to the US dollar are those in China, Hong Kong, and Malaysia. Those markets whose currencies have a tight link with the US dollar are Taiwan and Thailand. And those that try to hold down their currencies with the US dollar include Indonesia, Japan, and Korea. Those with a looser link and whose currencies are more free include India and Singapore. And most of the smaller markets fit into the category of loosely-linked to the US dollar.)
What will these big changes mean to the travel business?
Of course it depends where you are, what segment of the travel business you are in, where your customers are, what currency they pay and you pay, and a thousand other things. But there are some broad indicators nevertheless – covered in Table 9.
Unfortunately, none of these outcomes are certain, because prices adjust to new fiscal realities – they counter the difference of pure money movements. In addition, some goods and services are affected directly by price moves.
Another crucial factor is customer sentiment, and this sometimes ignores facts. If travel-lers think all-Europe is expensive, then they may go somewhere else this year, even a-voiding non-Euro UK.
For professionals in the travel business, tracking developments is going to be more diffi-cult over the next year at least. For instance, most regional financial measures are quo-ted in US dollars.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
